What is the MHG ETF used for?
The Magellan MHG Fund is an actively-managed portfolio that invests in a select array of international companies. The fund typically selects between 20-40 global equities and hedges its exposure against the Australian dollar to manage currency risks.
MHG could be used by investors looking for a concentrated portfolio of leading global companies, as selected and managed by the investment team at Magellan. According to Magellan, it looks for shares that are trading at an appropriate discount to their assessed intrinsic value.
Keep an eye on FUM
The Magellan MHG ETF had $163.76 million of money invested when we last pulled the monthly numbers. Given MHG’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the International shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Fees and costs for investors
Magellan charges investors a yearly management fee of 1.35% for the MHG ETF. This means that if you invested $2,000 in MHG for a full year, you could expect to pay management fees of around $27.00.
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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the MHG ETF. Before doing anything, take a look at our Magellan MHG report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
