You might be sitting back and considering the iShares Enhanced Cash ETF (ASX: ISEC) and thinking that March could be as good of a time as any to take closer look. Here’s how we would start our research.
Find out what the ETF does
The iShares ISEC ETF provides investors with exposure to higher-yielding, short-term money market instruments, including floating rate notes. ISEC seeks to outperform the S&P/ASX Bank Bill Index (before fees and expenses).
ISEC’s FUM meets our hurdle
The iShares ISEC ETF had $204.17 million of money invested when we last pulled the monthly numbers. Given ISEC’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 Cash – Australian sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Pay attention to yearly costs & fees
iShares charges investors a yearly management fee of 0.12% for the ISEC ETF. This means that if you invested $2,000 in ISEC for a full year, you could expect to pay management fees of around $2.40.
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.
Our takeaway
If you’re thinking about investing in ISEC, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free iShares ISEC report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Cash – Australian sector to do a good comparison.
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