How the SUBD ETF fits into an ASX portfolio
The VanEck SUBD ETF invests in a portfolio of Australian dollar-denominated subordinated bonds from a range of banks and insurance companies.
Investors could use the SUBD ETF to diversify an existing equities portfolio and gain exposure to subordinated debt, or to create a regular income stream from the monthly distributions offered by this ETF.
SUBD meets our minimum level for FUM
The VanEck SUBD ETF had $257.73 million of money invested when we last pulled the monthly numbers. Given SUBD’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 Fixed interest – Australia sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
What about management fees and costs?
VanEck charges investors a yearly management fee of 0.29% for the SUBD ETF. This means that if you invested $2,000 in SUBD for a full year, you could expect to pay management fees of around $5.80.
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.
Next steps
Before buying any ETF based on what you read here on Best ETFs, check out our VanEck SUBD report – it’s completely free! Then, search our complete list of ASX ETFs to do a proper side-by-side comparison of your chosen sector or thematic.
So how can you actually invest in the SUBD ETF? In the month of June 2024, you can buy the SUBD 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 SUBD for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
