You might be sitting back and considering the iShares Core Composite Bond ETF (ASX: IAF) and thinking that December 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 IAF ETF provides Australian investors with exposure to a portfolio of Australian investment-grade fixed income securities, which includes treasury bonds, corporate bonds and cash.
IAF’s FUM meets our hurdle
The iShares IAF ETF had $1531.75 million of money invested when we last pulled the monthly numbers. Given IAF’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.
Pay attention to yearly costs & fees
iShares charges investors a yearly management fee of 0.15% for the IAF ETF. This means that if you invested $2,000 in IAF for a full year, you could expect to pay management fees of around $3.00.
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.
If you’re thinking about investing in IAF, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free iShares IAF report. And for good measure, search our complete list of ASX ETFs for similar ETFs in the Fixed interest – Australia sector to do a good comparison.