What is the MVS ETF used for?
The VanEck MVS ETF provides exposure to a diversified portfolio of Australian small caps, with a focus on highly liquid, dividend-paying companies. This ETF tracks the MVIS Australia Small-Cap Dividend Payers Index.
The MVS ETF could be used by investors looking to invest in Australian small caps, with a focus on stocks that are paying dividends and have high levels of liquidity. Navigating away from the largest ASX companies removes a lot of the exposure to the financials sector and could diversify your Australian portfolio allocation.
Keep an eye on FUM
The Vaneck MVS ETF had $47.2 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 Vaneck, 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.
Fees and costs for investors
Vaneck charges investors a yearly management fee of 0.49% for the MVS ETF. This means that if you invested $2,000 in MVS for a full year, you could expect to pay management fees of around $9.80.
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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the MVS ETF. Before doing anything, take a look at our Vaneck MVS report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
So how can you actually invest in the MVS ETF? In the month of August 2023, you can buy the MVS 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 MVS for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
