BetaShares Australian High Interest Cash ETF

AAA Details
Built a diversified portfolio:BetaShares Australian High Interest Cash ETF (ASX: AAA) currently manages over 39 funds and built a diversified portfolio from their first ETFs launched in December 2010.  Some of the recent launches include BetaShares Australian Bank Senior Floating Rate Bond ETF (ASX: QPON), which is the first ETF in Australia to offer exposure to a portfolio of Australian Bank senior floating rate bonds. QPON would be offering an attractive income paid monthly, while investors could also enjoy the diversification benefits and relative capital stability of floating rate notes. QPON built a portfolio of major liquid floating rate bonds issued by Australian banks and invested 80% of its assets in floating rate bonds issued by the big four Australian banks, while the rest 20% is invested in bonds issued by the large ‘regional’ banks, including Macquarie Bank and AMP Bank.


BetaShares portfolio as of July 2017 (Source: Company reports)
 
Meanwhile, BetaShares has recently appointed Damon Riscalla for Melbourne Operations as National Manager, Adviser Services. The group also launched Australian Small Companies Select Fund (managed fund) (ASX: SMLL), which enables investors to leverage the capital growth and income from a select portfolio of high quality, profitable Australian small companies. On the currency side, the group launched two new funds: BetaShares Strong Australian Dollar Fund (hedge fund) (ASX: AUDS) as well as the BetaShares Strong U.S. Dollar Fund (hedge fund) (ASX: YANK). AUDS offers investors with huge “long AUD” exposure to the change in the value of the Australian Dollar relative to the US Dollar. AUDS could be used by Australian financial advisors and investors to hedge against U.S. Dollar denominated investments. YANK offers investors with a huge “long USD” exposure enabling them to leverage the US Dollar performance relative to the Australian Dollar. The ETF has been paying consistent dividends to its investors while recently paid a distribution of $0.086 in August 2017. This can be an interesting stock to look at while it is vulnerable to dollar fluctuations and risks relating to exposure to banking sector. The stock looks “Expensive” at the current price of $ 50.13, and we would review the stock later.
 

AAA Daily Chart (Source: Thomson Reuters)

iShares Enhanced Cash ETF

ISEC Details

For short-term fixed rate securities: iShares Enhanced Cash ETF (ASX: ISEC) is launched by Blackrock with an aim to offer exposure to a diversified portfolio of money market and short-term fixed rate Australian dollar securities and has an objective to beat the S&P/ASX Bank Bill Index. Accordingly, the fund is aimed in investing in higher-yielding, high-quality short-term money market instruments including floating notes. Moreover, the fund distributes income on a monthly basis while rebalanced on a daily basis. They recently paid a cash distribution amount of 17.087 cents per unit in August 2017. In July, ISEC paid a dividend of 14.06 cents per share. ISEC portfolio comprises 80.7% of cash/derivatives, 16.8% of corporates and 2.6% of government related sectors. Further, the ETF has 8.7% of portfolio of A ratings, 2.6% of AA ratings and 80.7% in cash/ derivatives. Top holdings of the ETF include ANZ Savings Bank, Overseas Chinese Banking, DBS Bank, Suncorp and Sumitomo Mitsui Banking. 

iShares ETF outstanding units (Source: Company reports)
 
However, ISEC stock has generated only 0.10% returns since its inception and 0.08% in one month (as at August 18, 2017). The current trading conditions and an insight on returns make us believe that the stock is “Expensive” at the current price of $ 100.18
 

ISEC Daily Chart (Source: Thomson Reuters)

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