Would a shrewd ASX investor consider the Perth Mint Gold ETF (ASX: PMGOLD) and Switzer Quality Global Growth Fund (Quoted Managed Fund) ETF (ASX: WCMQ) right about now? These two ASX ETFs invest in the Commodities and International shares sectors, respectively.
The Perth Mint PMGOLD ETF (ASX:PMGOLD)
The Perth Mint PMGOLD ETF represents a right to gold created by The Perth Mint, Australia’s largest fully integrated precious metals enterprise. The ETF gives investors the ability to purchase Government-backed gold via the ASX, rather than holding physical bars themselves.
According to our most recent data, the PMGOLD ETF had $582.94 million of money invested. With PMGOLD’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 Commodities 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.
Fees to consider
According to our numbers, the annual management fee on the PMGOLD ETF is 0.15%. The issuer, Perth Mint, collects this fee automatically.
Meaning, if you invested $2,000 in the PMGOLD ETF for a full year you could expect to pay management fees of around $3.00. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.), which is the fee to buy or sell the ETF. In addition to a management fee charged by the issuer, be mindful to check the ‘spread‘ for the ETF.
A fee comparison
Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you’re looking at is too costly, compare it with other ETFs from the same sector, and against the industry average. For example, the average management fee (MER) across all of the ETFs covered by the Best ETFs Australia team was 0.51%, which is $10.20 per $2,000 invested. Keep in mind that small changes in the fees paid can make a big difference after 10 or 20 years. You should read the PMGOLD Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
These are high level ideas or basics of the PMGOLD ETF. To learn more about it, click through to access our free investment review.
The WCM Quality Global Growth Fund (Quoted Managed Fund) (ASX:WCMQ)
The WCMQ Fund is issued by Switzer and investments are managed by WCM Investment Management. WCMQ uses an active investment approach and invests with high conviction in shares of companies that its investment team deem to be high-quality, growth-style companies.
With our numbers for July 2021, WCMQ’s FUM stood at $294.01 million. Since the WCMQ’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 Growth factor sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the WCMQ ETF bad?
Switzer, the ETF issuer, charges a yearly management fee of 1.35% for the WCMQ ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $27.00.
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.
Before you read the Product Disclosure Statement (PDS) or speak to your financial adviser about the WCMQ ETF report (both are very important), take a look at our free investment review.
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