It’s time to run a ruler over BetaShares Australian Major Bank Hybrids Index ETF (ASX: BHYB) and iShares S&P 500 AUD Hedged ETF (ASX: IHVV). The ETFs invest in the Fixed interest – Australia and International shares sectors/industries, respectively.
The BetaShares Major Banks Hybrids ETF (ASX:BHYB)
The BetaShares Australian Major Bank Hybrids ETF (ASX: BHYB) aims to provide investors with monthly income from a portfolio of listed hybrid securities issued by the Big 4 Australian banks. For context, a hybrid is a financial product that combines characteristics from two or more financial instruments, typically debt and equity securities. This means that a hybrid security will share some characteristics of both bonds and shares.
According to our most recent data, the BHYB ETF had $18.18 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.
To learn more about the BHYB ETF, read our free ETF investment report once you’re done with this article.
iShares IHVV ETF (ASX:IHVV)
The iShares IHVV ETF provides investors with exposure to the largest 500 US companies. This is a low-cost way to access leading US companies through a single fund.
With our numbers for July 2021, IHVV’s FUM stood at $569.6 million. Since the IHVV’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 IHVV ETF bad?
iShares, the ETF issuer, charges a yearly management fee of 0.10% for the IHVV ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $2.00.
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.
Did you know that you get access to our free investment report on Best ETFs Australia? View the free IHVV ETF report by clicking here.
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