In this article, we’ll try to explain why the VanEck Vectors MSCI International Sustainable Equity ETF (ASX: ESGI) and Magellan Global Equities Fund (Managed Fund) ETF (ASX: MGE) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the ESGI ETF
The VanEck ESGI ETF provides exposure to sustainable international companies not including Australian or fossil fuel stocks.
According to our most recent data, the ESGI ETF had $45.28 million of money invested. Given its funds under management (also known as FUM or ‘market cap’) is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this general rule, especially if the ETF issuer/provider is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
Like the look of the ESGI ETF? Grab our ETF free investment report.
The MGE ETF – a quick look for savvy investors
The Magellan MGE Fund is an actively managed portfolio that invests in a select array of international companies. The fund typically selects between 20-40 global equities.
With our numbers for Oct 2020, MGE’s FUM stood at $1773.51 million. Since the MGE’s FUM is over $100 million, our investing team would say the ETF has met our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the Active ETF (e.g. ETMF) sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the MGE ETF bad?
Magellan, the ETF issuer, charges a yearly management fee of 1.35% for the MGE ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $27.00.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
The Magellan MGE ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.
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