If you’re looking for an ASX ETF in the Cash – Australian sector, chances are, the iShares Enhanced Cash ETF (ASX: ISEC) is an ETF you’re considering. Here’s what you need to know.
How ASX investors can use the ISEC ETF
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).
Investors could use the ISEC ETF in an attempt to achieve capital preservation and/or create a maximised, regular income stream from the monthly distributions offered by this ETF.
ISEC meets our minimum market cap (FUM) criteria
The iShares ISEC ETF had $266.59 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.
ISEC ETF fees explained
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 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Putting it all together
If you’re weighing up investing in ISEC, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free iShares ISEC report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the Cash – Australian sector to compare your options.
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