You might be sitting back and considering the iShares S&P/ASX 20 ETF (ASX: ILC) and thinking that June 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 ILC ETF provides exposure to the largest 20 Australian stocks, giving you targeted exposure to Australian blue-chip companies. This is a low-cost way to access top Australian companies through a single fund.
The iShares ILC ETF could be used by investors looking to gain focused exposure to Australia’s largest public companies. These Australian companies are likely to grow their profits over time and have a track record of paying regular tax-effective dividends for their shareholders.
ILC’s FUM meets our hurdle
The iShares ILC ETF had $443.59 million of money invested when we last pulled the monthly numbers. Given ILC’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 Australian shares 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 0.24% for the ILC ETF. This means that if you invested $2,000 in ILC for a full year, you could expect to pay management fees of around $4.80.
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.
Our takeaway
If you’re thinking about investing in ILC, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free iShares ILC report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Australian shares sector to do a good comparison.
