Why do investors own the iShares Core Global Corporate Bond (AUD Hedged) ETF?
The iShares IHCB ETF provides investors with access to the performance of investment-grade corporate bonds across global markets and sectors, hedged into Australian dollars. This is a relatively low-cost way to get exposure to global investment-grade corporate bonds in a single fund.
According to our most recent data, the IHCB ETF had $310.85 million of money invested. With IHCB’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 Fixed interest – International 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 IHCB ETF is .26%. The issuer, iShares, collects this fee automatically.
Meaning, if you invested $2,000 in the IHCB ETF for a full year you could expect to pay management fees of around $5.20. 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 0.5%, which is $10.00 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 IHCB Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Don’t stop here, to get our full IHCB ETF review, click through to this ETF review page now.
Vaneck Australian Resources ETF
The VanEck MVR ETF provides focused exposure to the Australian resources sector, which is a significant part of the Australian economy. This is a low-cost way to invest in the Australian resources industry through a single fund.
With our numbers for July 2022, MVR’s FUM stood at $238.5 million. Since the MVR’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 Index sector should be able to scale well and become profitable for the ETF issuer.
A look at the MVR ETF fee load?
Vaneck, the ETF issuer, charges a yearly management fee of 0.35% for the MVR ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $7.00.
This management fee is below the average for all ETFs on our Best ETFs Australia list of ETFs. However, you might still be able to find a cheaper ETF for less.
To discover more facts about the MVR ETF, read our free ETF investment report.
So how can you actually invest the MVR ETF? By getting a free brokerage account with Pearler. If you join Pearler in the month of Mar 2024, with your free Pearler account you can buy the MVR ETF and pay $0 in brokerage fees. All you have to do is buy and hold the ETF for 12 months.
You can invest as little as $500 in the MVR ETF to take-up this offer. Sounds pretty good, right? To invest in MVR for $0 brokerage, simply click here to visit Pearler’s website and sign up.
