Getting exposure to the Australian shares sector has never been easier thanks to ASX ETFs like the Betashares Australian Equities Bear (Hedge Fund) ETF (ASX: BEAR). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review.
How the BEAR ETF could be used in portfolios
The BetaShares BEAR Fund is designed to provide inverse or opposite exposure to the largest Australian shares, based on market capitalisation. When the S&P/ASX 200 Accumulation Index falls, BEAR aims to generate positive returns for investors.
The BEAR ETF is yet to reach our FUM target
The Betashares BEAR ETF had $77.11 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 Betashares, 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.
BEAR’s fees & costs explained
Betashares charges investors a yearly management fee of 1.38% for the BEAR ETF. This means that if you invested $2,000 in BEAR for a full year, you could expect to pay management fees of around $27.60.
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 BEAR ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the BEAR ETF’s Product Disclosure Statement (PDS), available on the Betashares website, or speak to your financial adviser. For another handy resource, take a look at our Betashares BEAR 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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