Investing your money to get exposure to the Australian shares sector has never been easier thanks to ASX ETFs like the Betashares Australian Dividend Harvester Fund (Managed Fund) ETF (ASX: HVST). Before you make an investment, we think it’s important to do your own ETF review. So, here are three tips to get the ball rolling.
1. Find out what the HVST ETF invests in
With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.
2. Has the ETF reached scale?
The Betashares HVST ETF had $132.57 million of money invested when we last pulled the monthly numbers. Given HVST’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Australian shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
3. Watch the fees (and other costs)
Betashares charges investors a yearly management fee of 0.90% for the HVST ETF. This means that if you invested $2,000 in HVST for a full year, you could expect to pay management fees of around $18.00.
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.
Where to from here in 2020?
So there you have it, three tips to weigh up the HVST ETF. Before you go any further, take a look at our Betashares HVST report – it’s free. Then, to make sure you’ve covered all bases, don’t forget to search our complete list of ASX ETFs to compare your options. You can filter the search results according to sector, issuer, size and more.
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