Don’t you wonder if now is the time to start analysing the VanEck Vectors MSCI International Sustainable Equity ETF (ASX: ESGI) and Magellan Global Equities Fund Currency Hedged (Managed Fund) ETF (ASX: MHG)? These Exchange-Traded Funds (ETFs) operate in the International shares sector, a key sector for diversified portfolios.
Is the ESGI ETF a good investment? Here’s where you start…
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 $55.66 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.
Get our team’s ESGI ETF review, available free when you click this link: access the free investment report.
A quick take of the MHG ETF
The Magellan MHG Fund is an actively-managed portfolio that invests in a select array of international companies. The fund typically selects between 20-40 global equities and hedges its exposure against the Australian dollar to manage currency risks.
With our numbers for December 2020, MHG’s FUM stood at $326.76 million. Since the MHG’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 MHG ETF bad?
Magellan, the ETF issuer, charges a yearly management fee of 1.35% for the MHG 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.
Did you know: you can get our full ETF review of MHG by clicking here?
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