1. Exposure
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.
2. Funds under management (FUM)
The VanEck SUBD ETF had $257.73 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.
3. Management fees & costs matter
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.
What now?
These are just some of the considerations or factors you would need to consider when weighing up the SUBD ETF. If you’re looking to do some further digging, be sure to read our VanEck SUBD report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs. You can filter the results according to sector, issuer, size, and more.
So how can you actually invest in the SUBD ETF? In the month of February 2023, 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).
