iShares Government Inflation ETF (ILB)

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/100915-2023-10-26-02:33.pdf
FUND MANAGER BlackRock Investment Management (Australia)
INVESTMENT STYLE The Fund invests in a portfolio composed of fixed income bonds issued by the Australian Treasury or Australian semi-government entities.
INVESTMENT PROFILE The Fund aims to provide investors with the performance of the Benchmark, before fees and expenses.
BENCHMARK Bloomberg AusBond Inflation Government 0+ Yr Index
FUND SIZE Bloomberg AusBond Inflation Government 0+ Yr Index
FEES 0.18% p.a.



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:

  • low cost access to a highly transparent diversified portfolio of liquid institutional-quality cash and money market securities; and
  • the ability to achieve capital preservation and either regular or potentially enhanced regular income.
  • The significant benefits of investing in the Fixed Income Funds include:
  • low cost access to diversified portfolios of Australian fixed income securities;
  • access to broad market investment grade, treasury and inflation-linked fixed income exposures; and
  • benchmarked to institutional-quality indices provided by leading index providers.

Other benefits of investing in iShares ETFs generally include:

  • Diversification: In contrast to a direct investment in a single company or bond, an iShares ETF provides, as far as possible and practicable, exposure to all of the securities or instruments within the index that the particular iShares ETF seeks to track.
  • Access global markets: iShares ETFs let you achieve international diversification by investing in overseas equity and bond markets. With iShares ETFs you can gain exposure by asset class, market capitalisation, country and sector.
  • Liquidity and transparency: Each iShares ETF seeks investment results that correspond generally to the performance (before fees and expenses) of a particular index. As a traded security, an iShares ETF enables you to enter and exit your holding on the ASX. You can easily track performance and trade during ASX trading hours (subject to ASX rules).
  • Managing risk: Investing in an iShares ETF can assist you in establishing a portfolio appropriate to your investment needs and risk profile.
  • Lower cost: As each iShares ETF is passively managed and designed to track the performance of a particular index, the expenses of managing an iShares ETF are generally lower compared to other forms of retail managed funds. However, brokerage or adviser fees may still apply when buying or selling units of an iShares ETF.
  • Receipt of income: You will generally receive income from your investment in the form of distributions. Distributions may include dividends, coupons and other income. There may be years in which no distributions are made.
  • Accessibility: iShares ETFs can offer a cost-effective way to gain exposure to a diversified portfolio of securities. They can be less costly than purchasing a large number of individual securities as there are less trading costs and they offer lower thresholds than an investor might otherwise be able to afford.




Key Features

About the Fund

The fund aims to provide investors with the performance of an index, before fees and expenses, composed of fixed income bonds issued by the Australian Treasury or Australian semi-government entities. 

The index, the Bloomberg AusBond Inflation Government 0+ Yr Index, measures the performance of a segment of the Australian bond market comprised of inflation-linked fixed income securities.

Why ILB?

  1. Simple exposure to Australian inflation-linked fixed income securities 
  2. Seek to protect your portfolio from inflation 
  3. Use to diversify your portfolio and customise your fixed income allocation


How we invest your money

The Fund seeks to achieve its objective by tracking the performance of the Bloomberg AusBond Government Inflation 0+ Yr Index (referred to as the Index).

We believe that stratified sampling is the most appropriate investment strategy to track the performance of the Index as it takes into account liquidity, transaction cost impact, and overall risk relative to the Index.

Stratified sampling involves choosing a subset of Index eligible securities to create a portfolio that behaves like the Index. In many cases, holding every security in the Index isn't cost effective as illiquid or thinly traded securities incur higher transaction costs and wider bid-ask spreads. By investing in a subset of securities that combine to match the overall risk profile of the Index it saves the Fund incurring unnecessary trading costs which can detract from total Fund returns.

A stratified sampling approach is usually accomplished by dividing up the Index into strata or "cells along some of the more common fixed income security attributes such as: maturity, sector and credit quality. Securities are then chosen that have similar risk and return characteristics that replicate each of the cells and in units consistent with Index exposures.

What does the Fund invest in?

The Fund generally invests in the inflation-linked fixed income securities issued by the Australian Treasury or Australian semi- government entities that form the Index.

The Fund may hold some securities which are not constituents of the Index where such securities provide similar performance (with matching risk profile) to certain securities that make up the Index. However, from time to time the Fund may hold all constituents of the Index.

The Fund may also hold small amounts of cash (or cash equivalents, that may include units in other BlackRock funds) for cash flow management purposes and may also invest in index futures contracts for cash bondisation purposes.

About the Index

The Index is designed to measure the performance of the Australian bond market which meets certain investment criteria and covers fixed interest securities issued in the Australian debt market under Australian law. The Index is market value weighted and designed to measure the total return from investing in a range of Index eligible securities. Below is a description of the manner in which the debt securities included are determined. The Index has been calculated since 31 March 1991.

For more information please see Section 6 of the PDS