Analyst says this ASX ETF is a top buy (and names 1 to hold)

Let's see which funds are being talked about by this analyst.

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Key points

  • An active ETF focused on small ASX-listed companies is named a buy for its strong recent performance and potential to outperform market indices.
  • A subordinated debt ETF is recommended as a hold, offering appealing income returns but with potential distribution risks linked to interest rate changes.
  • The funds cover a range of sectors, with the small companies ETF outperforming its benchmark and the debt ETF providing stable income from investment-grade bonds.

Due to their increasing popularity, there are a lot of exchanged traded funds (ETFs) to choose from on the Australian share market.

But which ones could be buys this week?

Let's take a look at one that has been named as a buy and one that has been named as a hold by analysts courtesy of The Bull. Here's what you need to know about them:

Firetrail Aust Small Companies Fund – Active ETF (ASX: FSML)

The team at DP Wealth Advisory believes that the Firetrail Aust Small Companies Fund could be a good option for investors. It has named the ASX ETF as a buy.

As you might have guessed from its name, this fund is focused on the small side of the market. Its holdings currently include tech star Life360 Inc (ASX: 360), bauxite miner Metro Mining Ltd  (ASX:MMI), and gold miner Genesis Minerals Ltd (ASX: GMD). It commented:

This active exchange traded fund focuses on smaller ASX-listed companies. It generally holds between 30 and 60 companies, aiming to outperform the ASX Small Ordinaries Accumulation Index over the medium to long term. The ongoing management expense ratio is 0.85 per cent per annum. Key holdings included Life360, Genesis Minerals and Channel Infrastructure NZ at August 31, 2025. The fund returned 11.03 per cent, after fees, for the month ending August 31, 2025, outperforming the ASX Small Ordinaries Accumulation Index by 2.62 per cent. We expect FSML to continue performing well. The fund has risen from $1.55 on April 9 to trade at $2.27 on October 9.

VanEck Australian Subordinated Debt ETF (ASX: SUBD)

The broker isn't a buyer of the VanEck Australian Subordinated Debt ETF. Instead, it is recommending this ASX ETF as a hold.

This fund invests in a portfolio of subordinated bonds with the aim of providing investment returns before fees and other costs that track the performance of the index. Its holdings include notes from Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) to name two.

Commenting on the fund, DP Wealth said:

Listed in October 2019, SUBD holds a portfolio of subordinated bonds, issued predominantly by Australian banks and insurers. The bonds are all investment grade, either rated A or BBB, with an average maturity of eight years. The ETF's appealing income return was above 5.7 per cent in the 12 months to September 30, 2025. However, it's important to note that distributions may retreat if the Reserve Bank of Australia's cash rate falls.

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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