What is the ISEC ETF used for?
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.
Keep an eye on FUM
The iShares ISEC ETF had $306.34 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.
Fees and costs for investors
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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the ISEC ETF. Before doing anything, take a look at our iShares ISEC report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.