ETF Does the size of the ETF matter (QOZ vs VAS)

I'm pondering investing a lump sum into either QOZ or VAS. But I've noticed the size of QOZ has shrunk in recent years.

Is this a warning flag?

 

I have both but more VAS.
http://www.etfwatch.com.au/funds/QOZ/

Theories:
- QOZ only around since 2014 and the impatient ones hoping for a short term outperformance weren't satisfied so they moved to recently better performing assets.
- A200 and it's low fees enticed a few.

I think QOZ will have its day, but by its nature they will be few and far between.

 

Thanks. I'm particularly piqued by the higher yield.

The lump sum would be considerable, hence the question about whether size matters.

 

Bit dated but might help:

Australian index ETF showdown: IOZ, STW & VAS compared - ETF

 

You don't have to get just the one.

Survivorship is a real concern, don't follow QOZ. A few years ago I got the impression it would stick around.

 

Forget the product, the question is “smart” beta or cap weight index. These are very different exposures. STW vs VAS makes sense, RAFI index vs ASX300 means that more work is required. If you can’t make that call then go cap weight, you will chuck in the RAFI product at the worst time.

 

Oops, I misread. Thought QOZ was IOZ.

 

I like the theory behind QOZ. Long-term liquidity is the concern if I buy and hold down the track.

 

So from what I can glean, at present the RAFI index has greater weights allocated to banks and retail than the cap weighted index.

Pass (for me). Obviously others have to make their own decision.

 

Liquidity is not a concern. Product survivability may be an issue as is the high payout ratio. A product like this has significantly higher turnover which results in larger distributions and lower franking levels and less capital gain, so tax considerations. In a zero / extremely low tax
environment there may be something in RAFI methodology but otherwise I can’t see it. The product gives up 25bps+ and has turnover related tax costs compared to cap weight - I don’t think long run it will be able to overcome, and that is the survivability issue.

 

RAFI takes no view on sectors. From memory it’s running a basic value and size screen, Having watched it in the past whatever is cheap on fundamentals it will be overweight. So a lot of people won’t be able to stick with it. It was very heavy on BHP and RIO a few years ago when nobody wanted anything to do with them.

 

Sorry if I'm being overly persistent. Just trying educate myself.



QOZ has rebalanced and BHP and RIO, for example, are now lower.

The franked component seems similar to VAS in spite of the somewhat higher turnover.

It seems to occupy a slot inbetween VAS and VHY.

Which was the appeal.