In this article, we’ll try to explain why the SPDR S&P/ASX 200 Financials ex A-REITs Fund ETF (ASX: OZF) and Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the OZF ETF
The SPDR OZF ETF is a more unique ETF that invests in financial companies from within the ASX 200, while excluding A-REITs and other real-estate and development related companies.
According to our most recent data, the OZF ETF had $129.98 million of money invested. With OZF’s total funds under management (FUM) figure over $100 million, the ETF meets our team’s minimum investment criteria for FUM levels. As a general rule, our team draws the line at $100 million for ETFs in the Australian shares sector because we believe that, relative to smaller ETFs, achieving this amount of FUM lowers the chance that the ETF issuer will close the ETF.
Like the look of the OZF ETF? Grab our ETF free investment report.
The VLC ETF – a quick look for savvy investors
The Vanguard VLC ETF provides exposure to the MSCI Australian Shares Large Cap Index. This index is a ‘free float-adjusted market capitalization index’ which provides investors with exposure to the largest companies on the ASX.
With our numbers for July 2021, VLC’s FUM stood at $141.05 million. Since the VLC’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 VLC ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.20% for the VLC ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $4.00.
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.
The Vanguard VLC 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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