In this article, we’ll try to explain why the Perth Mint Gold ETF (ASX: PMGOLD) and Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO) are two ASX ETFs worth taking a look at in FY21.
Some things you should know about the PMGOLD ETF
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 $610.27 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.
Like the look of the PMGOLD ETF? Grab our ETF free investment report.
The VSO ETF – a quick look for savvy investors
The Vanguard VSO ETF provides exposure to a diversified portfolio of Australian small caps and tracks the MSCI Australian Shares Small Cap Index. This is a low-cost way to access the performance of Australian small-cap shares through a single fund.
With our numbers for December 2021, VSO’s FUM stood at $723.46 million. Since the VSO’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 VSO ETF bad?
Vanguard, the ETF issuer, charges a yearly management fee of 0.30% for the VSO ETF. Meaning, if you invested $2,000 for a full 12-month period you could expect to pay a base management fee of around $6.00.
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.
The Vanguard VSO ETF might be one idea for the watchlist but before you go any further, click here to get our full ETF review – it’s free.
