Is IHEB a good ETF?
IHEB is the iShares J.P.Morgan USD Emerging Markets Bond (AUD Hedged) ETF from iShares. We classify it under Bonds and Intl. With about $49 million in assets it is a relatively small fund (worth checking spreads and liquidity before buying).
On a total-return basis, IHEB has delivered 1.84% a year over 10 years (ranked 95th of 108 ETFs we track), 0.05% a year over 5 years (ranked 162nd of 188 ETFs we track), 6.83% a year over 3 years (ranked 156th of 226 ETFs we track), and 6.61% a year over 1 year (ranked 160th of 308 ETFs we track). It has trailed most comparable ETFs over the periods we measure, so look closely at whether its strategy fits what you're after.
The management fee of 0.53% is on the higher side. For comparison, similar ETFs average around 0.45%. It pays a high 6.08% yield — generous income, but check it isn't a sign of a narrow or higher-risk portfolio. Bear in mind distributions are taxed each year at your marginal rate, so a high yield is less tax-efficient for higher earners and during the accumulation phase.
Over the past 10 years its volatility has been moderate (annualised standard deviation around 9.66%), meaning the kind of swings you'd expect from a diversified equity fund. Its 3-year Sharpe ratio of 0.4 is weak — that's the return it has earned per unit of risk taken (higher is better).
Strengths
- High 6.08% income yield — good for investors who want regular cash flow.
Things to watch
- Has lagged most peers over 10 years (95th of 108).
- Pricier than similar ETFs, which average around 0.45%.
- That income is taxed yearly at your marginal rate, so it's less efficient for higher earners.
- Weak risk-adjusted returns (3-year Sharpe ratio 0.4).
What IHEB's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Global and international shares from outside Australia — broadening you into thousands of companies and the sectors (tech, healthcare) the local market lacks.
- Market regime
- Essential diversification away from the bank-and-resources-heavy ASX. Unhedged versions carry currency risk; hedged versions remove it at a small cost.
- In a portfolio
- A core holding for almost every long-term Australian portfolio.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.