What you need to know about the SPDR BOND ETF (ASX: BOND) and the VanEck CNEW ETF (ASX: CNEW)


The SPDR S & P / ASX Australian Bond Fund ETF (ASX: BOND) and VanEck Vectors China New Economy FNB (ASX: CNEW) are exchange traded funds (ETFs) operating in fixed interest sectors – Australia and international equities, respectively.

How would an investor add BOND to a portfolio?

The name is… the SPDR BOND ETF. BOND invests in investment grade Australian bonds denominated in Australian dollars with maturities greater than one year.

According to our most recent data, the BOND ETF had invested $ 42.72 million. Since its funds under management (also known as FUM or ‘market cap’) are less than $ 100 million, you must be wondering if this ETF is still too small and sustainable for the ETF issuer. . TO Best ETFs we say an ETF with more … than $ 100 million invested is generally more sustainable than an investment 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 increasing ETF WAF through effective marketing strategies and distribution to advisers. financial.

Fees to consider

According to our figures, the annual management fee of the BOND ETF is 0.24%. The issuer, SPDR, receives this commission automatically.

In other words, if you have invested $ 2,000 in the BOND ETF for a full year you can expect to pay a management fee of around $ 4.80. These fees are different from the fees 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 the management fees charged by the issuer, don’t forget to check the ETF’s “spread”.

A comparison of fees

Fees aren’t the only key consideration for ETF investors, but it’s an easy thing to do. To understand if the ETF you are looking for is too expensive, compare it to other ETFs in the same industry and the industry average. For example, the average management fee (MER) of all ETFs covered by the Best ETFs Australia the team was 0.51%, or $ 10.20 for every $ 2,000 invested. Keep in mind that small changes in fees paid can make a big difference after 10 or 20 years. You should read the BOND Product Disclosure Statement (PDS), available on the ETF issuer’s website, as it will detail the fees, tax implications and the latest information.

The ETF BOND could be one of them to add to your watchlist. If you would like to access our full ETF review, click here for our full report – it’s completely free.

Know the CNEW ETF

The VanEck CNEW ETF provides investors with exposure to Chinese companies primarily in the IT, healthcare, consumer staples and consumer discretionary sectors.

With our numbers for July 2021, CNEW’s WUF stood at $ 144.13 million. Since CNEW’s MAF is over $ 100 million, our investment team would say the ETF has hit our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the index sector should be able to perform well and become profitable for the ETF issuer.

Are CNEW ETF Charges Bad?

VanEck, the issuer of the ETF, charges an annual management fee of 0.95% for the CNEW ETF. In other words, if you have invested $ 2,000 for a full period of 12 months you can expect to pay a base management fee of around $ 19.00.

Management fees are above the average of all ETFs in our ASX ETF list, but keep in mind that ETF can justify the higher price with superior performance over time.

Choosing ETFs sounds too easy to be true: “pick one and put it in your bottom drawer”. However, it’s important to get it right the first time so you don’t have to change jobs (and possibly pay additional taxes). To make your life easier, if you are looking at the CNEW ETF, be sure to click here to access our Analyst Investment Report. It’s free.


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