Is ISEC a good ETF?
ISEC is the iShares Enhanced Cash ETF from iShares. We classify it under AU and Bonds. With about $729 million in assets it is a solidly established fund.
On a total-return basis, ISEC has delivered 3.35% a year over 5 years (ranked 134th of 188 ETFs we track), 4.44% a year over 3 years (ranked 183rd of 226 ETFs we track), and 4.16% a year over 1 year (ranked 197th 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 0.12% is very low — typical of low-cost index funds. That's cheaper than the typical 0.32% for similar ETFs. If cost is your priority, BILL (0.07%) cover similar ground for less. It pays a healthy 4.11% yield, attractive if you want regular income. 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 5 years its volatility has been low (annualised standard deviation around 0.49%), meaning a relatively smooth ride. Its 5-year Sharpe ratio of 0.88 is reasonable — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is very low at about 0% a year — the portfolio barely changes from year to year, much like a classic buy-and-hold index fund. Very little of its return is lost to trading or to capital gains being realised early, making it highly tax-efficient.
Strengths
- Low-cost: a 0.12% management fee keeps more of the return in your pocket.
- Pays a useful 4.11% income yield.
- Low volatility (0.49% over 5 years) for a smoother ride.
Things to watch
- Has lagged most peers over 3 years (183rd of 226).
- Cheaper alternatives exist: BILL.
Good to know
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What ISEC's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
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.