BetaShares GEAR Fund is an internally geared fund, investing in the largest 200 companies on the ASX, by market capitalisation.
As at the end of last month, the GEAR ETF had $174.24 million of money invested. Given GEAR’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 derisks the ETF.
Fees & costs
The yearly management fee on the GEAR ETF is 0.8%. The issuer, Betashares, takes this out automatically.
What this fee means is, if you invested, say, $2,000 in the GEAR ETF for a full year you could expect to pay management fees of around $16.00. This fee is different from the fee you pay to your brokerage provider (e.g. CommSec, NabTrade, SelfWealth, etc.) to buy or sell the ETF. Importantly, you should also be mindful of the ‘spread‘ for the ETF.
Is the ETF too expensive?
The easiest way to know if the ETF is too costly is to compare it with other ETFs in the same sector, and against the industry average. The average management fee (MER) across all of the ETFs covered by
Best ETFs Australia
is 0.5%, which is around $10.00 per $2,000 invested. Small changes in fees can make a big difference after 10 or 20 years. To understand all of the fees, you should read the GEAR Product Disclosure Statement (PDS), available on the ETF issuer’s website, because it has the complete and up-to-date information.
https://www.bestetfs.com.au/2020/06…ear-and-ooo-etfs-on-your-long-term-watchlist/
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