Key Highlights

  • The fund is about $752.55 million in size and holds 91 companies and issuers.
  • Cash makes up 85.96% of the portfolio, with bonds at 14.04%.
  • The management fee is 0.12%, and the listed annual Yield is 4.46%.
  • The top ten holdings represent 14.29% of the fund, with issuers spread across Australia, Canada and New Zealand.

iShares Enhanced Cash ETF (ASX:ISEC) aims to outperform the S&P/ASX Bank Bill index using a passive approach that holds a portfolio of short-dated cash and fixed-interest securities. The units were listed at $100.39, the fund is about $752.55 million in size, and the management fee is 0.12%. The fund sits between a pure cash product and a short-term bond fund, which shapes both its income and its risk profile.

Ticker

ASX:ISEC

Listed price

$100.39

Fund size

$752.55 million

Management fee

0.12%

Listed annual yield

4.46%

Benchmark

S&P/ASX Bank Bill TR AUD

Holdings

91 companies

What the fund holds

Cash makes up 85.96% of the fund, and bonds account for 14.04%. Australia accounts for 53.42% of the portfolio, Canada for 17.31%, New Zealand for 14.81% and the Netherlands for 9.62%. The top ten holdings make up 14.29%, which is a low concentration for a cash product.

Largest positions include Kiwibank at 2.08%, Royal Bank of Canada Sydney Branch at 2.02% and Macquarie Bank at 1.61%, with the rest spread across banks and financial institutions.

Income and costs

The listed annual yield is 4.46%, and the management fee is 0.12%. The yield is above that of a pure bank bill product because the fund holds some higher-yielding fixed-interest securities alongside cash. The additional yield comes with a small amount of additional risk.

Risks to weigh

The fund's approach to outperforming bank bills means it takes on some Credit and duration risk, which a pure cash fund does not. Its unit price can move slightly when the holdings are repriced. Its heavier exposure to overseas banks adds some foreign issuer risk. Investors who want the lowest risk should consider how far the extra yield compensates for those points.

Final Word

The iShares Enhanced Cash ETF aims to earn more than bank bills by adding a modest amount of fixed-interest exposure. Its yield is higher than a pure cash fund, but investors take on some additional credit and rate risk to receive it.