If you’re looking for an ASX ETF in the International shares sector, chances are, the Montaka Montaka Global Extension Fund (ASX: MKAX) is an ETF you’re considering. Here’s what you need to know.
How ASX investors can use the MKAX ETF
The Montaka Global Extension fund is a listed managed fund which aims to offer investors exposure to long-term structural winning companies in attractive industries. Typically, the MKAX fund aims to hold 15 to 30 long positions in companies which are medium to large cap, together with 10-40 stock-specific short positions.
The MKAX fund could be used by investors to get exposure to a concentrated portfolio of large companies from the US markets and elsewhere outside Australia, together with select short positions.
The MKAX ETF is yet to reach scale
The Montaka MKAX ETF had $44.6 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as Montaka, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
MKAX ETF fees explained
Montaka charges investors a yearly management fee of 1.25% for the MKAX ETF. This means that if you invested $2,000 in MKAX for a full year, you could expect to pay management fees of around $25.00.
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.
Putting it all together
If you’re weighing up investing in MKAX, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free Montaka MKAX report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the International shares sector to compare your options.
