You might be sitting back and considering the BetaShares Australian Bank Senior Floating Rate Bond ETF (ASX: QPON) and thinking that December 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 BetaShares QPON ETF provides investors with exposure to a portfolio of some of the largest and most liquid senior floating rate bonds issued by Australian banks.
Investors could use the QPON ETF to diversify an existing portfolio and gain exposure to Australian floating rate bank bonds, or to create a regular income stream from the monthly distributions offered by this ETF. A floating rate bond is a debt security that pays a regular coupon (interest) that varies over time – this differs from a fixed rate bond which pays the same rate of interest over the life of the bond.
QPON’s FUM meets our hurdle
The BetaShares QPON ETF had $697.01 million of money invested when we last pulled the monthly numbers. Given QPON’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
BetaShares charges investors a yearly management fee of 0.22% for the QPON ETF. This means that if you invested $2,000 in QPON 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 QPON, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free BetaShares QPON 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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