iShares Enhanced Cash ETF (ISEC)
About this Fund
|FUND MANAGER||BlackRock Investment Management (Australia)|
|ASSET CLASS||EXCHANGE TRADED FUNDS|
|INVESTMENT STYLE||The Fund offers the ability to achieve capital preservation and potentially enhanced regular income with a diversified portfolio of higher-yielding high quality short-term money market instruments, including floating rate notes.|
|INVESTMENT PROFILE||The Fund seeks to achieve its objective by employing a passive investment strategy that aims to outperform the performance of the Benchmark (before fees and expenses).|
|BENCHMARK||S&P/ASX Bank Bill Index|
|FUND SIZE||S&P/ASX Bank Bill Index|
|NO. OF HOLDINGS||Around 50|
Benefits of iShares
iShares ETFs are managed funds listed or quoted on exchanges (including ASX) providing you with the opportunity to gain exposure to a diversified portfolio of assets in a single transaction.
The significant benefits of investing in the Cash Funds include:
Other benefits of investing in iShares ETFs generally include:
About the Fund
The Fund seeks to achieve its objective by employing a passive investment strategy that aims to outperform the performance of the S&P/ASX Bank Bill Index (before fees and expenses).
The Fund offers the ability to achieve capital preservation and potentially enhanced regular income with a diversified portfolio of higher-yielding high quality short-term money market instruments, including floating rate notes.
The Fund is truly liquid and only holds investments in instruments that can easily be sold to meet investor liquidity requirements.
How we invest your money
The Fund seeks to achieve its objective by employing a passive investment strategy that aims to outperform the performance of the S&P/ASX Bank Bill Index (referred to in this section 5 of the PDS as the Index).
The Fund will be managed using a buy and hold investment philosophy, similar to other passive investment strategies, with full daily portfolio transparency. A sampling methodology has been selected as the most appropriate investment technique, as it keeps trading costs to a minimum and provides the necessary flexibility to deliver investment returns that either meet or at times may exceed Index returns. Any outperformance of the Index will not be a result of active trading nor the investment expertise of the individual fund manager(s) in selecting particular investment securities that it considers will perform better relative to other securities. Rather, returns above the Index would typically result from prudent risk mitigation and diversification measures, including:
The Fund is also expected to attract additional returns from attractive interest rates on Australian dollar cash deposits. The interest rate on cash deposits will most likely exceed the 24 hour Cash Rate that is used as a price input into the Index return calculation, as BlackRock has long established commercial relationships with several Australian ADIs, which allows cash to be placed on deposit at commercial rates.
What does the Fund invest in?
The Fund generally invests in Australian dollar cash deposits and NCDs, with the majority of such investments being with the four main Australian banks. The Fund may also invest in Australian dollar denominated treasury notes and commercial paper issued by the Australian Government and other semi-government entities, corporate issued commercial paper, and corporate issued floating rate notes.
The Fund may invest up to a maximum of 20% in FRNs with limits placed on single security exposure, credit rating exposure and maturity (maximum FRN maturity of 5 years). The Fund will not purchase any securities or invest in any deposits that have issuer- imposed repayment restrictions, such as term deposits or notice period deposit accounts. All securities will settle within the standard T+2 settlement timeframe for ETFs.
About the Index
The Index offers short-term exposure to Australian dollar- denominated bank bills with maturity profiles of up to 91 days.
For more information please see Section 5 of the PDS