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About a year ago I purchased a number of units in Betashares S&P 500 Yield Maximiser ETF (UMAX) to give my SMSF extra global exposure. This fund has a management charge of 0.79%, which in hindsight seems a bit high. It was only yesterday that I looked at the portfolio holdings which appears to consist of approximately 80% iShares Core S&P 500 ETF with the remainder in US dollars.
This appears to be iShares ticker code IVV, which has a management charge of 0.04%. Would you be able to tell me I am correct and if so, should I sell UMAX and buy IVV?
A: Yes, UMAX does hold about 97% IVV (which only charges 0.04% in management fees), however, it writes call options on the IVV it holds to generate additional income (this is part of its strategy).
But, this can be a flawed concept, as demonstrated by UMAX’s dreadful performance record, underperforming by almost 6% pa since inception:
Fund Returns After Fees (%)
| Fund | S&P 500 Index (TR, A$) | |
| 1 month | 1.24% | 3.26% |
| 3 months | -9.00% | 0.46% |
| 6 months | -11.74% | -0.54% |
| 1 year | 1.49% | 17.08% |
| 3 year p.a | 5.56% | 13.85% |
| 5 year p.a | 6.66% | 12.35% |
| Since inception (p.a) | 9.30% | 15.28% |
| Inception date | 17-Sep-14 | – |
* As at 29 May 2020
Sell.
