How ASX investors can use the ZYAU ETF
The Global X ZYAU ETF invests in 50 high-dividend stocks from the S&P/ASX 200 Index. To avoid ‘yield traps’, ZYAU uses a forward looking dividend forecast system to identify and capture the highest dividend-paying companies, and the portfolio weighting tilts towards these companies.
The ZYAU ETF could be used by investors looking for a diversified portfolio of Australian companies, that have a track record of paying regular tax-effective dividends to their shareholders.
The ZYAU ETF is yet to reach scale
The Global X ZYAU ETF had $71.99 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 Global X, 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.
ZYAU ETF fees explained
Global X charges investors a yearly management fee of 0.35% for the ZYAU ETF. This means that if you invested $2,000 in ZYAU for a full year, you could expect to pay management fees of around $7.00.
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 ZYAU, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free Global X ZYAU report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the Australian shares sector to compare your options.
