Find out what the ETF does
The iShares ILB ETF provides investors with exposure to the performance of a segment of the Australian bond market comprised of inflation-linked fixed income securities.
Investors could use the ILB ETF to diversify an existing portfolio and gain exposure to Australian bonds with protection from inflation. Additionally, ILB could be used to create a regular income stream from the quarterly distributions offered by this ETF. The value of inflation-linked bonds are periodically adjusted according to the rate of inflation so as to provide investors with a level of protection against inflation.
ILB’s FUM meets our hurdle
The iShares ILB ETF had $511.79 million of money invested when we last pulled the monthly numbers. Given ILB’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 0.18% for the ILB ETF. This means that if you invested $2,000 in ILB for a full year, you could expect to pay management fees of around $3.60.
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 ILB, bear in mind that this is just an introductory glance at the ETF. To explore further, check out our free iShares ILB 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.