Getting exposure to the Fixed interest – Australia sector has never been easier thanks to ASX ETFs like the iShares Treasury ETF (ASX: IGB). That said, no matter how easy it seems to be, we think it’s still important to do your own ETF review.
How the IGB ETF could be used in portfolios
The iShares IGB ETF provides investors with diversified access to Australian government bonds with a broad range of maturities. This is a relatively low-cost way to get exposure to Australian Treasury bonds in a single fund.
IGB exceeds our minimum market cap (FUM) criteria
The iShares IGB ETF had $109.83 million of money invested when we last pulled the monthly numbers. Given IGB’s total funds under management (FUM) figure is over $100 million, the ETF has met our minimum criteria for the total amount of money invested, otherwise known as FUM. We draw the line at $100 million for ETFs in the Fixed interest – Australia sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
IGB’s fees & costs explained
iShares charges investors a yearly management fee of 0.18% for the IGB ETF. This means that if you invested $2,000 in IGB for a full year, you could expect to pay management fees of around $3.60.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Bottom line
This is just a quick overview of the IGB ETF. Before ‘testing the depth of water with both feet’ so to speak, be sure to read the IGB ETF’s Product Disclosure Statement (PDS), available on the iShares website, or speak to your financial adviser. For another handy resource, take a look at our iShares IGB report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
[ls_content_block id=”4954″ para=”paragraphs”]
