What does the SUBD ETF do for a diversified portfolio?
The VanEck SUBD ETF invests in a portfolio of Australian dollar-denominated subordinated bonds from a range of banks and insurance companies.
Investors could use the SUBD ETF to diversify an existing equities portfolio and gain exposure to subordinated debt, or to create a regular income stream from the monthly distributions offered by this ETF.
How big is the VanEck SUBD ETF?
The VanEck SUBD ETF had $266.45 million of money invested when we last pulled the monthly numbers. Given SUBD’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.
SUBD ETF fees reviewed
VanEck charges investors a yearly management fee of 0.29% for the SUBD ETF. This means that if you invested $2,000 in SUBD for a full year, you could expect to pay management fees of around $5.80.
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.
Next steps
Even if you like what you see, before diving straight into buying the SUBD ETF, please read the ETF’s Product Disclosure Statement (PDS). Also, be sure to take a look at our VanEck SUBD report for a more comprehensive overview of this ETF. While you’re on our website, use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
So how can you actually invest in the SUBD ETF? In the month of July 2022, you can buy the SUBD 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 SUBD for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
