How the BBOZ ETF fits into an ASX portfolio
The BetaShares BBOZ Fund is designed to provide protection from a declining Australian equity market. When the S&P/ASX 200 Accumulation Index falls, BBOZ aims to generate magnified returns for investors.
The BetaShares BBOZ Fund could be used by experienced investors to hedge their portfolio against market declines, effectively betting against the Australian stock market. This is a high risk strategy as gains and losses are magnified, compared to a simple ETF tracking the ASX 200 Index. BBOZ is a highly volatile Fund, and there is no guarantee the ETF will provide effective or perfect protection in a falling market.
BBOZ meets our minimum level for FUM
The BetaShares BBOZ ETF had $270.7 million of money invested when we last pulled the monthly numbers. Given BBOZ’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 Australian shares sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
What about management fees and costs?
BetaShares charges investors a yearly management fee of 1.38% for the BBOZ ETF. This means that if you invested $2,000 in BBOZ for a full year, you could expect to pay management fees of around $27.60.
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 BetaShares BBOZ 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.
