How ASX investors can use the HLTH ETF
The HLTH ETF invests in shares of international healthcare companies which offer growth ‘at a reasonable price’. Meaning, the ETF aims to invest in shares according to the common GARP methodology.
The index behind the HLTH ETF is well diversified across weightings, with the largest holdings often around 3% of the portfolio. Geographically, the holdings are primarily domiciled in the United States, consisting of 50% – 55% of the index.
The HLTH ETF is yet to reach scale
The VanEck HLTH ETF had $78.53 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.
HLTH ETF fees explained
VanEck charges investors a yearly management fee of 0.45% for the HLTH ETF. This means that if you invested $2,000 in HLTH for a full year, you could expect to pay management fees of around $9.00.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% 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.
Putting it all together
If you’re weighing up investing in HLTH, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free VanEck HLTH report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the International shares sector to compare your options.
So how can you actually invest in the HLTH ETF? In the month of September 2023, you can buy the HLTH 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 HLTH for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
