Investing your money to get exposure to the International shares sector has never been easier thanks to ASX ETFs like the ETF Securities Battery Tech & Lithium ETF (ASX: ACDC). 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 ACDC ETF invests in
The ETFS ACDC ETF provides investors with passive exposure to the performance of companies involved in battery technology and lithium mining. ACDC adopts an equal weight strategy, meaning that it weights the shares within the portfolio equally – this is different from traditional index fund ETFs which invest more in the largest companies (as determined by market capitalisation).
2. Has the ETF reached scale?
The ETF Securities ACDC ETF had $303.18 million of money invested when we last pulled the monthly numbers. Given ACDC’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 International 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)
ETF Securities charges investors a yearly management fee of 0.69% for the ACDC ETF. This means that if you invested $2,000 in ACDC for a full year, you could expect to pay management fees of around $13.80.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 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 ACDC ETF. Before you go any further, take a look at our ETF Securities ACDC 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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