On the ASX, the BetaShares Global Banks ETF – Currency Hedged ETF (ASX: BNKS) and iShares S&P Midcap ETF (ASX: IJH) are two ASX ETFs worthy of closer inspection.
What the BetaShares BNKS ETF does for investors
If you’re looking for an ETF made up entirely of global banks (ex-Australia), then BNKS provides a solution. This ETF tracks the Nasdaq Global ex-Australia Banks Hedged AUD Index.
According to our most recent data, the BNKS ETF had $112.92 million of money invested. With BNKS’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 International shares 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.
Fees to consider
According to our numbers, the annual management fee on the BNKS ETF is 0.0057. The issuer, BetaShares, collects this fee automatically.
Meaning, if you invested $2,000 in the BNKS ETF for a full year you could expect to pay management fees of around $11.40. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.), which is the fee to buy or sell the ETF. In addition to a management fee charged by the issuer, be mindful to check the ‘spread‘ for the ETF.
A fee comparison
Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you’re looking at is too costly, compare it with other ETFs from the same sector, and against the industry average. For example, the average management fee (MER) across all of the ETFs covered by the Best ETFs Australia team was 0.51%, which is $10.20 per $2,000 invested. Keep in mind that small changes in the fees paid can make a big difference after 10 or 20 years. You should read the BNKS Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Side note: did you know you can access our full review of the BNKS ETF by clicking here?
What does the iShares IJH ETF do?
The iShares IJH ETF provides investors with exposure to mid-cap US companies. This is a low-cost way to access a specific segment of the US market through a single fund.
With our numbers for December 2021, IJH’s FUM stood at $238.93 million. Since the IJH’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.
A look at the IJH ETF fee load?
iShares, the ETF issuer, charges a yearly management fee of 0.0009 for the IJH ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $1.80.
This management fee is below the average for all ETFs on our Best ETFs Australia list of ETFs. However, you might still be able to find a cheaper ETF for less.
If you want to learn more about the IJH ETF, you should know that you can access our free investment report.
