In this article, we’ll try to explain why the Betashares Australian Equities Bear (Hedge Fund) ETF (ASX: BEAR) and iShares S&P Midcap ETF (ASX: IJH) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the BEAR ETF
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.
According to our most recent data, the BEAR ETF had $65.66 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.
Like the look of the BEAR ETF? Grab our ETF free investment report.
The IJH ETF – a quick look for savvy investors
The iShares IJH ETF provides investors with exposure to mid-cap US companies. This is a low-cost way to access a specific segment of the US market through a single fund.
With our numbers for July 2021, IJH’s FUM stood at $209.68 million. Since the IJH’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 IJH ETF bad?
iShares, the ETF issuer, charges a yearly management fee of 0.09% for the IJH ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $1.80.
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.
The iShares IJH ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.
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