Don’t you wonder if now is the time to start analysing the iShares J.P.Morgan USD Emerging Markets Bond (AUD Hedged) ETF (ASX: IHEB) and Russell Investments High Dividend Australian Shares ETF (ASX: RDV)? These Exchange-Traded Funds (ETFs) aim to provide exposure to the Fixed interest – International and Australian shares sectors, respectively.
Is the IHEB ETF a good investment? Here’s where you start…
The iShares IHEB ETF provides investors with exposure to the performance of global emerging markets bonds that are US dollar-denominated, hedged back into Australian dollars.
According to our most recent data, the IHEB ETF had $39.06 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 IHEB ETF review, available free when you click this link: access the free investment report.
A quick take of the RDV ETF
The Russell Investments RDV ETF invests in a diversified portfolio of high-yielding ‘blue chip’ Australian companies. This ETF tracks this Russell Australia High Dividend Index.
With our numbers for December 2020, RDV’s FUM stood at $262.28 million. Since the RDV’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 Index sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the RDV ETF bad?
Russell Investments, the ETF issuer, charges a yearly management fee of 0.34% for the RDV ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $6.80.
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 RDV by clicking here?
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