BetaShares, Australia’s third-largest ETF provider, is listing the country's first FTSE 100 ETF.
The index, which should need no introduction, is made up of 100 of the UK's largest companies, weighted by size. The BetaShares FTSE 100 ETF (F100) will charge a total expense ratio of 0.45%.
While there are currently three Europe ETFs in Australia (ESTX, VQE, IEU) there are none that focus exclusively on the UK.
Analysis – great initiative; too expensive
A FTSE 100 tracker is an overdue addition to the Australian market. the UK has one of the greatest capital markets in the world, and some of the most successful companies. Given how many British ex-pats work in Australia there is sure to be a market for this ETF.
Not only is the UK a great market, now is a great time to buy. With markets spooked by Brexit and Corbyn, Britain offers value at a time that the Aussie home market (to say nothing of the US) is looking increasingly expensive.
If I had a qualm with F100 it would be the fee. 0.45% for plain vanilla UK exposure seems pretty steep to me. For those with overseas bank accounts or those able to access the London Stock Exchange, European ETF providers give this exposure for 0.05%. Is the shortcut that F100 provides really worth 9x the cost?
As a separate aside I have great admiration for BetaShares willingness to continue trialing new products. It always adds colour to the market and keeps me in a job.