What is the RSM ETF used for?
The Russell Investments RSM ETF is a portfolio of Australian state government fixed-income securities that meet a range of size and maturity selection criteria.
RSM could be used by investors looking for a portfolio of Australian state government bonds, and aims to track the performance of the DBIQ 0-5 year Australian Semi-Government Bond Index.
Keep an eye on FUM
The Russell Investments RSM ETF had $46.02 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 Russell Investments, 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
Russell Investments charges investors a yearly management fee of 0.26% for the RSM ETF. This means that if you invested $2,000 in RSM for a full year, you could expect to pay management fees of around $5.20.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 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 RSM ETF. Before doing anything, take a look at our Russell Investments RSM report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
