1. Find out what the FOOD ETF invests in
The BetaShares FOOD ETF provides investors with exposure to the performance of the largest agricultural companies in the world (excluding Australia), hedged into Australian dollars.
The BetaShares FOOD ETF could be used by investors looking for tactical exposure to the performance of global agricultural companies outside of Australia, while reducing currency risk through hedging strategies. Due to improved living standards and rising populations, demand for agricultural products and services is expected to continue to rise.
2. Has the ETF reached scale?
The BetaShares FOOD ETF had $142.89 million of money invested when we last pulled the monthly numbers. Given FOOD’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 International shares 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)
BetaShares charges investors a yearly management fee of 0.57% for the FOOD ETF. This means that if you invested $2,000 in FOOD for a full year, you could expect to pay management fees of around $11.40.
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 FOOD ETF. Before you go any further, take a look at our BetaShares FOOD 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.