You might be sitting back and considering the VanEck Vectors Australian Floating Rate ETF (ASX: FLOT) and thinking that November could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
The VanEck FLOT ETF gives investors exposure to a portfolio of Australian dollar-denominated floating rate bonds of investment-grade quality.
November
FLOT’s FUM meets our hurdle
The VanEck FLOT ETF had $297.35 million of money invested when we last pulled the monthly numbers. Given FLOT’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 Fixed interest – Australia sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Pay attention to yearly costs & fees
VanEck charges investors a yearly management fee of 0.22% for the FLOT ETF. This means that if you invested $2,000 in FLOT for a full year, you could expect to pay management fees of around $4.40.
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.
Our takeaway
If you’re thinking about investing in FLOT, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free VanEck FLOT report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Fixed interest – Australia sector to do a good comparison.
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