CHOOSING INVESTMENTS
How is the AUM looked at for a diversified ETFs like DZZF compared to underlying ETFs it has?
Hi, i am currently investing into betashares DZZF etf. I wanted high growth diversified ESG etf and i believe dzzf was/is the only option today. This etf looks good to me but the AUM under the etf is just around $40M. Is this a concern for long term investment and any risk of it getting closed prematurely in future? ETFs underlying dzzf are FAIR, ETHI and GBND. FAIR and ETHI themselves have AUM over $1.2B and $2B respectively.
2 Comments
over 1 year ago
Hey Deepak. It’s a good question to ask. You may even like to reach out to Betashares and see what they say about the issue. Is the fund currently profitable for them to run? If not, would they consider closing it if they don’t reach a certain amount of FUM? They may not answer these questions, but it couldn’t hurt to ask.
The underlying ETFs certainly seem likely to remain running with that kind of size, so the real question is DZZF itself. One thing to note is that when an ETF shuts down it’s not like you lose your money. The shares will be sold and the money returned to you, so if anything, it would be more of an annoyance than anything. At least that’s my understanding.
Given the likelihood that ‘ethical’ style investing seems likely to grow over the next decade or two as a concept, I would guess that Betashares would be willing to keep this one open for quite a while and hope it gains traction. Just my two cents :)
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ReplyDeepak Nayak
INVESTOR
over 1 year ago
Thanks for your answer Dave! If i ask betashares about their etf getting closed in future, i am sure the answer I’d get from them would be «unlikely» 🙂
I understand i would not loose money if the etf gets closed. As this is my long term investment strategy, I’d rather not want it to get closed. I was just curious about these ETFs which uses other underlying ETFs. How useful is the AUM for a diversified ETFs like DZZF to an ETF provider (betashares) sustainability/continuity-wise if the money invested here is actually going into the underlying ETFs?
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