When I first started diversifying into equity investing 5 years ago, I bought in to several equal-weighted ProShares dividend aristocrat/dividend grower funds trying my best to split between us/int/emerging.
As I have learned more over the years, there are a few particular etfs in my portfolio that have been nagging at me: TMDV , EMDV (and to a lesser extent EFAD).
While the expense ratio for all of these funds is reasonable (0.35%), they all have under $100mm AUM with TMDV being only $9mm!
I first had trouble with these in 2020 when I took advantage of TLH opportunities during COVID and finding comparable ETFs. Additionally, these each had incredible low trading volume. Low enough that my entire stake was more than the daily volume!
It doesn't help that in 2023, these were one of the few etfs in my portfolio to have a loss in 2023 ytd. I do understand this is partially due to rising interest rates. After all, these are dividend focused funds.
So my main question is what are the main risks you would consider when holding low AUM funds? Are there any hidden costs of things such as turnover % that factor in to low AUM funds? Im happy with my other investments with ProShares such as NOBL & REGL so Im not worried about the organization. As of now, I dont plan on selling any of my holdings but it has been very tempting.
As I have learned more over the years, there are a few particular etfs in my portfolio that have been nagging at me: TMDV , EMDV (and to a lesser extent EFAD).
While the expense ratio for all of these funds is reasonable (0.35%), they all have under $100mm AUM with TMDV being only $9mm!
I first had trouble with these in 2020 when I took advantage of TLH opportunities during COVID and finding comparable ETFs. Additionally, these each had incredible low trading volume. Low enough that my entire stake was more than the daily volume!
It doesn't help that in 2023, these were one of the few etfs in my portfolio to have a loss in 2023 ytd. I do understand this is partially due to rising interest rates. After all, these are dividend focused funds.
So my main question is what are the main risks you would consider when holding low AUM funds? Are there any hidden costs of things such as turnover % that factor in to low AUM funds? Im happy with my other investments with ProShares such as NOBL & REGL so Im not worried about the organization. As of now, I dont plan on selling any of my holdings but it has been very tempting.
Statistics: Posted by sir_jon — Thu Jan 04, 2024 12:50 pm — Replies 0 — Views 94
