1. The Schroder Investment Management Australia Limited Real Return Fund (Managed Fund) ETF (ASX:GROW) ETF
The Schroder GROW Fund is a multi-asset class, actively-managed portfolio of global assets. The fund aims to deliver a return of 5% per annum above inflation (before fees), over a rolling 3-year period.
According to our most recent data, the GROW ETF had $63.09 million of money invested. Given its funds under management (also known as FUM or ‘market cap’) is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. At Best ETFs we say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). However, there are exceptions to this general rule, especially if the ETF issuer/provider is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
Fees to consider
According to our numbers, the annual management fee on the GROW ETF is .83%. The issuer, Schroder Investment Management Australia Limited, collects this fee automatically.
Meaning, if you invested $2,000 in the GROW ETF for a full year you could expect to pay management fees of around $16.60. 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 GROW Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it will detail the fees, tax implications and the latest information.
Want to hear more about the GROW ETF? View our free investment review.
2. The iShares FTSE China Large-Cap ETF (ASX:IZZ) ETF
The iShares IZZ ETF provides investors with exposure to the 50 largest and most liquid companies in China which are listed on the Hong Kong Stock Exchange.
With our numbers for July 2022, IZZ’s FUM stood at $255.4 million. Since the IZZ’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 IZZ ETF fee load?
iShares, the ETF issuer, charges a yearly management fee of 0.77% for the IZZ ETF. Meaning, if you invest $2,000 for a full year from now you can expect to pay a management fee of around $15.40.
The management fee is above the average for all ETFs on our list of ASX ETFs, but keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Want to know more? Get our team’s free IZZ ETF review. Simply click here now.
