The VanEck Video Gaming and eSports ETF (ASX: ESPO) and Betashares Australian Dividend Harvester Fund (Managed Fund) ETF (ASX: HVST) are Exchange-Traded Funds (ETFs) operating in the International shares and Australian shares sectors, respectively.
How would an investor add ESPO to a portfolio?
The ESPO ETF invests in the world’s largest companies involved in global video game development, eSports, related hardware, and software by aiming to track the performance of the MVIS Global Video Gaming and eSports Index.
According to our most recent data, the ESPO ETF had $101.68 million of money invested. With ESPO’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 International 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.
Fees to consider
According to our numbers, the annual management fee on the ESPO ETF is 0.55%. The issuer, VanEck, collects this fee automatically.
Meaning, if you invested $2,000 in the ESPO ETF for a full year you could expect to pay management fees of around $11.00. 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 ESPO Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
The ESPO ETF could be one to add to your watchlist. If you want to access our full ETF review, click here to get our full report – it’s totally free.
Getting to know the HVST ETF
With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.
With our numbers for July 2021, HVST’s FUM stood at $172.52 million. Since the HVST’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 Yield/income sector should be able to scale well and become profitable for the ETF issuer.
Are the fees for the HVST ETF bad?
Betashares, the ETF issuer, charges a yearly management fee of 0.90% for the HVST ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $18.00.
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.
Picking over ETFs seems too easy to be true: ‘just pick one and put it in your bottom-drawer’. However, it’s important to get it right the first time so that you won’t end up having to chop-and-change positions (and potentially pay extra tax). To make your life a little easier, if you’re looking at the HVST ETF, make sure you click here to access our analyst’s investment report. It’s free.
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