How the MVOL ETF fits into an ASX portfolio
The iShares MVOL ETF invests in Australian companies, with a focus on minimising volatility and risk within the portfolio. This is a low-cost way to access top Australian companies through a single fund.
The iShares MVOL ETF may be something that investors consider if they are looking to reduce volatility, compared to the broader Australian equity market. Many of these Australian companies are likely to grow their profits over time and have a track record of paying regular tax-effective dividends for their shareholders.
MVOL ETF is not yet at our $100m minimum FUM level
The iShares MVOL ETF had $26.26 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as iShares, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
What about management fees and costs?
iShares charges investors a yearly management fee of 0.30% for the MVOL ETF. This means that if you invested $2,000 in MVOL for a full year, you could expect to pay management fees of around $6.00.
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
Before buying any ETF based on what you read here on Best ETFs, check out our iShares MVOL report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
