Expert Analysis on Top 3 ETFs Stocks Performance
The ASX 200 closed 63.90 points or 0.87% higher at $7,445.80 on Friday, posting slight losses of 0.14% over the week. Market participants cheered higher iron ore prices, buoying mining companies, while tech stocks rebounded as bond yields ticked lower.
Get insights on Top 3 ETFs for your next investment.
Top 3 ASX ETFs Stocks For Your Next Investment
As markets pull back, you might consider diversifying your stock portfolio with these uncorrelated ETFs:
The VanEck EMKT ETF (ASX: EMKT)
The VanEck EMKT is a fantastic ETF that gives you exposure to companies across a range of emerging markets. Emerging markets are typically associated with higher average returns over 10+ years. but they typically come with higher risk, as measured by volatility.
According to the most recent data, the EMKT ETF had $61.53 million of money invested. Given its funds under management is less than $100 million, you should consider if this ETF is still too small and if it is sustainable for the ETF issuer. It is important to note that an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million. However, there are exceptions to this general rule, especially if the ETF issuer is reputable and committed to growing the ETF’s FUM through effective marketing strategies and distribution to financial advisers.
The annual management fee on the EMKT ETF is 0.69%. The issuer, VanEck, collects this fee automatically. Meaning, if you invested $2,000 in the EMKT ETF for a full year you could expect to pay management fees of around $13.80. This fee is different from the fee you pay to your brokerage provider, which is the fee to buy or sell the ETF.
At the time of writing, The VanEck EMKT ETF is trading at $22.27 apiece. Year-to-date EMKT returned more than 11% and about 12.6% since the last twelve-month period.
BetaShares Crude Oil Index ETF (ASX: OOO)
ETF is an excellent investment vehicle to get exposed to a particular sector or investment theme. Crude oil has been on fire recently, with almost a 20% surge in the commodity price in the last three months.
The BetaShares OOO ETF provides investors with exposure to crude oil futures, hedged into Australian dollars. OOO’s fund under management or FUM stood at circa $247 million. Since the OOO’s FUM is over $100 million, we would say the ETF has met our minimum criteria for the total amount invested, otherwise known as FUM. A very sustainable ETF in the Index sector should be able to scale well and become profitable for the ETF issuer.
Another question that may arise, is are the fees for the OOO ETF bad?
Well, BetaShares, the ETF issuer, charges a yearly management fee of 1.29% for this ETF. Meaning, if you invested $2,000 for a full twelve-month period you could expect to pay a base management fee of around $25.80. The management fee for the OOO ETF is quite high compared to the average for all the Australian listed ETFs. But keep in mind the ETF may be able to justify the higher price tag with superior performance over time.
Hence, year-to-date, BetaShares OOO ETF returned a performance superior to 40%, and 67% over the last twelve-month period.
ETF Securities Physical Silver ETF (ASX: ETPMAG)
Another ETF worth taking a glance at is the ETPMAG ETF. What is exactly this ETF investment theme? Well, the ETPMAG ETF provides investors with access to the precious metal of silver, by seeking to achieve a return equivalent to the movements in the silver spot price, before fees and expenses.
So far this year, Silver has been moving sideways and is slightly down by 5% year-to-date. However, since the last month, the silver spot price appreciated by more than 8%.
Silver is a good alternative to gold. Silver is also used by investors to hedge. Because, much like other precious metals, silver can provide a low negative correlation to other assets. Because of this, adding silver to your investment portfolio can decrease risk overall.