1. The Vanguard MSCI Australian Large Companies Index ETF (ASX:VLC) ETF
The Vanguard VLC ETF provides exposure to the MSCI Australian Shares Large Cap Index. This index is a âfree float-adjusted market capitalization indexâ which provides investors with exposure to the largest companies on the ASX.
According to our most recent data, the VLC ETF had $158.79 million of money invested. With VLC’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 VLC ETF is .2%. The issuer, Vanguard, collects this fee automatically.
Meaning, if you invested $2,000 in the VLC ETF for a full year you could expect to pay management fees of around $4.00. 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 VLC Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Want to hear more about the VLC ETF? View our free investment review.
2. The BetaShares Australian Strong Bear (Hedge Fund) ETF (ASX:BBOZ) ETF
The BetaShares BBOZ Fund is designed to provide protection from a declining Australian equity market. When the S&P/ASX 200 Accumulation Index falls, BBOZ aims to generate magnified returns for investors.
With our numbers for July 2022, BBOZ’s FUM stood at $270.7 million. Since the BBOZ’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 Hedge fund sector should be able to scale well and become profitable for the ETF issuer.
A look at the BBOZ ETF fee load?
BetaShares, the ETF issuer, charges a yearly management fee of 1.38% for the BBOZ ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $27.60.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Want to know more? Get our team’s free BBOZ ETF review. Simply click here now.
