What the Russell Investments RDV ETF does for investors
The Russell Investments RDV ETF invests in a diversified portfolio of high-yielding âblue chipâ Australian companies. This ETF tracks this Russell Australia High Dividend Index.
According to our most recent data, the RDV ETF had $237.76 million of money invested. With RDV’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 Australian 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 RDV ETF is .34%. The issuer, Russell Investments, collects this fee automatically.
Meaning, if you invested $2,000 in the RDV ETF for a full year you could expect to pay management fees of around $6.80. 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 RDV 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 RDV ETF by clicking here?
What does the Vanguard VHY ETF do?
The Vanguard VHY ETF provides exposure to the largest dividend-paying Australian shares, based on market capitalisation and forecast dividend yield. It tracks the FTSE Australian High Dividend Yield Index. The index excludes real estate investment trusts (REITs) and caps the total exposure to any sector/industry at 40%.
With our numbers for July 2022, VHY’s FUM stood at $2307.04 million. Since the VHY’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 Yield/income sector should be able to scale well and become profitable for the ETF issuer.
A look at the VHY ETF fee load?
Vanguard, the ETF issuer, charges a yearly management fee of 0.25% for the VHY ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $5.00.
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 VHY ETF, you should know that you can access our free investment report.
