The iShares Global High Yield Bond (AUD Hedged) ETF (ASX: IHHY) could be one to watch in March and in this short article, we’ll run through arguably the three most important factors to consider when you’re reviewing an ASX ETF.
What the iShares IHHY ETF actually does
The iShares IHHY ETF provides investors with exposure to the performance of high-yield corporate bonds across global markets and sectors, hedged into Australian dollars. This is a simple way to get exposure to high-yield corporate bonds across global developed markets in a single fund.
Investors could use the IHHY ETF to diverisify an existing portfolio and seek potentially higher levels of income compared to standard corporate bonds – all the while potentially minimising the impact of Australian dollar volatility on investment returns.
IHHY meets our minimum FUM criteria
The iShares IHHY ETF had $128.55 million of money invested when we last pulled the monthly numbers. Given IHHY’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 – International sector because we believe that relative to smaller ETFs, achieving this amount of FUM de-risks the ETF.
Don’t forget IHHY’s fees
iShares charges investors a yearly management fee of 0.56% for the IHHY ETF. This means that if you invested $2,000 in IHHY for a full year, you could expect to pay management fees of around $11.20.
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.
What to do next
If you’re weighing up investing in the IHHY ETF, keep in mind that this is just a brief introduction. Indeed, before doing anything, take a look at our free iShares IHHY report. And while you’re at it, consider searching our complete list of ASX ETFs for similar ETFs in the Fixed interest – International sector to compare your options.