Investing your money to get exposure to the Fixed interest – Australia sector has never been easier thanks to ASX ETFs like the VanEck Vectors Australian Corporate Bond Plus ETF (ASX: PLUS). Before you make an investment, we think it’s important to do your own ETF review. So, here are three tips to get the ball rolling.
1. Find out what the PLUS ETF invests in
The VanEck PLUS ETF provides investors with exposure to a portfolio of Australian dollar-denominated bonds from investment-grade companies.
Investors could use the PLUS ETF to diversify an existing portfolio and gain exposure to investment-grade corporate debt, or to create a regular income stream from the quarterly distributions offered by this ETF.
2. Has the ETF reached scale?
The VanEck PLUS ETF had $236.16 million of money invested when we last pulled the monthly numbers. Given PLUS’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.
3. Watch the fees (and other costs)
VanEck charges investors a yearly management fee of 0.32% for the PLUS ETF. This means that if you invested $2,000 in PLUS for a full year, you could expect to pay management fees of around $6.40.
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.
Where to from here in 2020?
So there you have it, three tips to weigh up the PLUS ETF. Before you go any further, take a look at our VanEck PLUS report – it’s free. Then, to make sure you’ve covered all bases, don’t forget to search our complete list of ASX ETFs to compare your options. You can filter the search results according to sector, issuer, size and more.
So how can you actually invest in the PLUS ETF? In the month of April 2022, you can buy the PLUS ETF and get free brokerage with Pearler. All you have to do is buy and hold the ETF for 12 months! You can invest as little as $500. To buy PLUS for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
