Getting exposure to the International shares sector has never been easier thanks to ASX ETFs like the Montaka Montaka Global Extension Fund (ASX: MKAX). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review.
How the MKAX ETF could be used in portfolios
The Montaka Global Extension fund is a listed managed fund which aims to offer investors exposure to long-term structural winning companies in attractive industries. Typically, the MKAX fund aims to hold 15 to 30 long positions in companies which are medium to large cap, together with 10-40 stock-specific short positions.
The MKAX ETF is yet to reach our FUM target
The Montaka MKAX ETF had $39.22 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as Montaka, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
MKAX’s fees & costs explained
Montaka charges investors a yearly management fee of 1.25% for the MKAX ETF. This means that if you invested $2,000 in MKAX for a full year, you could expect to pay management fees of around $25.00.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Bottom line
This is just a quick overview of the MKAX ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the MKAX ETF’s Product Disclosure Statement (PDS), available on the Montaka website, or speak to your financial adviser. For another handy resource, take a look at our Montaka MKAX report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
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