What is a popular bond ETF in Australia?
A popular bond ETF in Australia is $VAF, which stands for Vanguard Australian Fixed Interest ETF.$VAFhas gained popularity among investors seeking exposure to the Australian fixed income market.
This ETF tracks the performance of the Bloomberg AusBond Composite 0+ Yr Index. The fund invests in a broad range of Australian fixed rate bonds, including government, semi-government and corporate bonds. By investing in $VAF, investors can gain access to a diversified portfolio of fixed income securities, potentially benefiting from regular income and the potential for capital appreciation.
Its popularity can be attributed to Vanguard's reputation, its wide range of bonds, and the ease and low return on investment in ETF form.
🎓 Learn more: What are government bonds?→
Top 10 ASX Bond ETFs in Australia
From year to year
BetaShares Australian Government ETF
425 million dollars
Vanguard Australian Fixed Interest ETF
SPDR S&P/ASX Australian Bond Fund
iShares Core Composite Bond ETF
1.8 billion dollars
Vanguard Australian Government Bond Index ETF
887 million dollars
BetaShares Investment Grade Australian Corporate Bond ETF
221 million dollars
BetaShares Investment Grade Australian Corporate Bond ETF - Currency Hedging
511 million dollars
Vanguard Global Aggregate Bond Index ETF Hedging
748 million dollars
iShares Corporate Corporate Bond ETF
101 million dollars
BetaShares Australian Bank Senior Floating Rate Bond ETF
840 million dollars
Data up to 22 May 2023.Source: Ulog, Google Finance, Yahoo Finance.
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Discover these Australian bond ETFs on the ASX
1. BetaShares Australian Government Bond ETF ($AGVT)
Assets under management (AUM):425 million dollars
Share price (as of May 22, 2023):$42.77
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):55% / 45%
AGVT is an ETF that aims to provide investors with exposure to Australian bonds. It invests in a diversified portfolio of Australian government bonds with maturities between 7 and 12 years. These bonds are issued by the Australian government and are considered low-risk investments. AGVT seeks to track the performance of the Solactive Australian Government 7-12 Year AUD Index.
2. Vanguard Australian Fixed Interest ETF ($VAF)
Assets Under Management (AUM):$1.38 billion
Share price (as of May 22, 2023):$45.43
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):90% / 10%
VAF is an ETF that seeks to track the performance of the Bloomberg AusBond Composite 0+ Yr Index. It invests in a wide range of Australian fixed rate bonds, including government, semi-government and corporate bonds. VAF offers investors exposure to the Australian fixed income market, providing diversification and potential income from dividend payments and capital appreciation.
🆚 Compare Comparison of VAF and VGB shares→
3. SPDR S&P/ASX Australian Bond Fund ($BOND)
Assets under management (AUM): $39.93 million
Share price (as of May 22, 2023):$24.49
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):59% / 41%
BOND is an ETF designed to provide investors with exposure to the Australian fixed income securities market. It aims to replicate the performance of the S&P/ASX Australian Fixed Income Index. BOND invests in a diversified portfolio of fixed rate bonds issued by governments, semi-governments and corporations.
4. iShares Core Composite Bond ETF ($IAF)
Assets under management (AUM): 1.8 billion dollars
Share price (as of May 22, 2023):$101.55
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):78% / 22%
IAF is an ETF that seeks to track the performance of the Bloomberg AusBond Composite 0+ Yr Index. It invests in a variety of Australian fixed income securities, including government, semi-government and corporate bonds. IAF provides investors with exposure to the Australian bond market.
🆚 CompareComparison of IAF and VAF shares→
5. Vanguard Australian Government Bond Index ETF ($VGB)
Assets under management (AUM): 887 million dollars
Share price (as of May 22, 2023):$46.70
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):65% / 35%
VGB is an ETF that aims to track the performance of the Bloomberg AusBond Treasury Index. It invests in a portfolio of high quality fixed rate Australian government bonds of various maturities. VGB provides investors with exposure to the Australian government bond market, which is typically considered a low-risk investment.
6. BetaShares Australian Investment Grade Corporate Bond ETF ($OZBD)
Assets under management (AUM): 221 million dollars
Share price (as of May 22, 2023):$44.50
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):Not available
OZBD is an ETF that invests in a diversified portfolio of investment grade Australian corporate bonds. It aims to track the performance of the Solactive Australian Investment Grade Corporate Bond Select Index TR. OZBD offers exposure to corporate bonds issued by Australian companies deemed to be of the highest credit quality.
7. BetaShares Australian Investment Grade Corporate Bond ETF - Currency Hedging ($CRED)
Assets under management (AUM): 511 million dollars
Share price (as of May 22, 2023):$22.30
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):60% / 40%
CRED is similar to OZBD, but includes a currency hedging function. This ETF invests in a diversified portfolio of investment-grade Australian corporate bonds, while seeking to reduce the impact of exchange rate fluctuations between the Australian dollar and foreign currencies. CRED aims to provide investors with exposure to Australian corporate bonds while reducing the impact of currency risk on future performance.
8. Vanguard Global Aggregate Bond Index ETF Hedged ($VBND)
Assets under management (AUM): 748 million dollars
Share price (as of May 22, 2023):$41.26
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):80% / 20%
VBND is an ETF that offers exposure to global fixed rate investment bonds while hedging currency risk from the Australian dollar. It seeks to replicate the performance of the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index. VBND provides investors with the opportunity to diversify their fixed income holdings internationally while mitigating the impact of exchange rate fluctuations on investment returns.
9. iShares Corporate Bond ETF ($ICOR)
Assets under management (AUM): 101 million dollars
Share price (as of May 22, 2023):$93.29
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):AND
ICOR invests in a diversified portfolio of investment grade Australian corporate bonds. The fund aims to track the performance of the Bloomberg AusBond Credit FRN 0+ Yr Index, which includes floating rate bonds issued by Australian companies. Floating rate bonds have interest rates that adjust periodically based on a benchmark rate, providing investors with potential protection from rising interest rates. ICOR offers exposure to the corporate bond market, allowing investors to earn income from coupon payments while maintaining a focus on credit risk.
10. BetaShares Australian Bank Senior Floating Rate Bond ETF ($QPON)
Assets under management (AUM): 840 million dollars
Share price (as of May 22, 2023):$25.84
Role Platform Bought/Sold (January 1, 2023 - May 22, 2023):67% / 33%
QPON provides investors with exposure to a portfolio of floating rate bonds issued by Australian banks. The ETF aims to track the performance of the Solactive Australian Bank Higher Floating Rate Bond Index. Higher floating rate bonds are debt securities with interest rates that adjust periodically based on a reference rate. QPON offers potential protection against rising interest rates (interest rate risk) and focuses on the banking sector, providing investors with coupon income while highlighting the credit risk of debt issued by banks.
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What is the most popular ETF for Australian government bonds?
The most popular Australian bond ETF is $VGB.$VGB, which stands for Vanguard Australian Government Bond Index ETF, has gained considerable popularity among investors seeking exposure to the Australian government bond market.
As an ETF, it offers the advantage of easy diversification and liquidity. $VGB aims to track the performance of the Bloomberg AusBond Treasury Index, which includes a selection of high-quality fixed-rate Australian government bonds of various maturities. Thisstock exchange fundenables investors to participate in the potential income and capital gains or appreciation of Australian government bonds, while providing a convenient and cost-effective way to invest with diversified exposure to this asset class.
Its popularity can be attributed to Vanguard's strong reputation, the attractiveness of government bonds as a relatively lower risk investment option and the ETF's ability to provide exposure to a diversified portfolio of Australian government bonds.
What is the 10 year Australian government bond rate?
At the time of writing, the Australian 10-year government bond yield was at3,59%. This rate represents the yield or interest rate on Australian government bonds with a maturity of 10 years.
It indicates the return the investor would get by holding these bonds to maturity. The 10-year government bond rate is an important benchmark in financial markets as it serves as a measure of the Australian government's long-term borrowing costs.
Investors and analysts watch this rate closely because it provides information about the market's expectations for economic growth, inflation and interest rates over the long term.
Which ASX bond ETF has the best 5-year return?
iShares State Inflation ETF (ILB) is the best-performing ETF over the past five years, though it has only gained +0.38% over that period due to the portfolio's sensitivity to recent rising interest rates.
This ETF is designed to provide investors with exposure to Australian government bonds aimed at hedging inflation. ILB invests primarily in a diversified portfolio of Australian inflation-linked bonds issued by the Australian Government. These bonds are specifically designed to adjust principal and interest payments based on changes in inflation rates, thus providing protection against rising prices.
This is not financial product advice or a recommendation to invest in the listed securities. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or tax advice before investing.
- VanEck Vectors Morningstar Wide Moat ETF (MOAT)
- Vanguard Australian Shares High Yield ETF (VHY)
- Global X ETFs Physical Gold (GOLD)
- BetaShares Crude Oil Index ETF - Currency Hedged (OOO)
- Vanguard FTSE Asia ex Japan Shares Index ETF (VAE)
- BetaShares Strong Australian Dollar Fund (AUDS)
Bond ETFs offer many advantages over single bonds: Diversification. With an ETF, you can own hundreds, even thousands, of bonds in an index at a purchase price significantly less than what it would be to invest in each issue individually. It's institutional-style diversification at retail prices.Are Australian bonds a good investment? ›
What types of bonds are there? Australian Government bonds: These are bonds issued by the federal government. Due to the lack of default risk, they are considered safer investments than corporate bonds and offer lower interest rates.What are the longest running bond ETFs? ›
- SPDR® Portfolio Long Term Corp Bd ETF.
- Vanguard Long-Term Corporate Bd ETF.
- iShares Core 10+ Year USD Bond ETF.
- Vanguard Long-Term Bond ETF.
- iShares 10+ Year Invmt Grd Corp Bd ETF.
- Invesco Taxable Municipal Bond ETF.
- iShares S&P/ASX Dividend Opportunities ESG Screened ETF (IHD)
- Russell High Dividend Australian Shares ETF (RDV)
- SPDR MSCI Australia Select High Dividend Yield Fund (SYI)
- Vanguard Australian Shares High Yield ETF (VHY)
- Global X S&P/ASX 300 High Yield Plus ETF (ZYAU)
The S&P/ASX 200 Index is the benchmark institutional investable stock market index in Australia, comprising the 200 largest stocks by float-adjusted market capitalization.What happens to bond ETFs when interest rates rise? ›
When interest rates rise, bond prices go down in value. Most bonds pay a fixed coupon (i.e. interest payment) and if rates go up, the only way a fixed coupon can equate to a higher interest rate is if the investor pays less for the bond.Do bond ETFs go up when interest rates go up? ›
Price change of a bond etf if interest rates increase by 1%
A duration 2 ETF drops about 2% in value if interest rates move up by 1%. It would gain 2% if rates fell by 1%. A duration 6 ETF drops about 6% in value if interest rates move up by 1%. It would gain 6% if rates fell by 1%.
When rates go up, bond prices typically go down, and when interest rates decline, bond prices typically rise. This is a fundamental principle of bond investing, which leaves investors exposed to interest rate risk—the risk that an investment's value will fluctuate due to changes in interest rates.What is the average return on Australian bonds? ›
The Australia 10Y Government Bond has a 3.719% yield. 10 Years vs 2 Years bond spread is 11.4 bp. Yield Curve is flat in Long-Term vs Short-Term Maturities. Central Bank Rate is 3.85% (last modification in May 2023).
The Australia 10 Years Government Bond Yield is expected to be 2.957% by the end of September 2023. It would mean a decrease of 43.8 bp, if compared to last quotation (3.395%, last update 13 May 2023 2:15 GMT+0). Forecasts are calculated with a trend following algorithm.Why have Australian bonds gone down? ›
The reason prices tend to fall is because the income from existing fixed-rate bonds is relatively less attractive than newly issued higher yielding bonds. Based on bond market pricing as of June 20, investors anticipate the average cash rate in Australia over the next three years to be just over 3.5%.What is the best performing ETF in last 5 years? ›
|ROM||ProShares Ultra Technology||22.31%|
|TAN||Invesco Solar ETF||22.15%|
|XSD||SPDR S&P Semiconductor ETF||21.11%|
|SMH||VanEck Semiconductor ETF||20.70%|
High Yield Bond Funds typically give out a higher rate of return since they have a lower credit rating., Issuers will give out a higher rate of interest to compensate for the risk the investors are willing to take.What is the largest bond ETF in the world? ›
The largest Bond ETF is the Vanguard Total Bond Market ETF BND with $91.94B in assets.Who is the largest ETF issuer in Australia? ›
The Vanguard Australian Shares Index ETF (VAS) now ranks as the largest ETF in Australia with a market cap of $11.8 billion as of the end of 2022. According to data published by BetaShares as part of its Australian ETF review for 2022, VAS received $2.6 billion of inflows last year, more than double any other ETF.What is the most expensive ETF on the ASX? ›
The most expensive offering (VanEck China New Economy ETF (ASX code: CNEW)) with a fee of 0.95% pa – starting to feel like active management fees – had negative 1 year returns of -19.72% and returned 8.02% pa over 3 years.Which ETF has the highest 10 year return? ›
|ETF Symbol||ETF Name||Performance|
|QCLN||First Trust NASDAQ Clean Edge Green Energy Index Fund||228.47%|
|RTH||VanEck Retail ETF||224.84%|
|PPA||Invesco Aerospace & Defense ETF||221.25%|
|SPY||Performance Benchmark: SPDR S&P 500 ETF Trust||153.94%|
Nasdaq – The Nasdaq 100 Index is a modified capitalisation-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the Nasdaq. The index is denominated in US dollars (ASX code NDX).What is the Australian equivalent of Dow Jones? ›
The S&P/ASX 200 is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. Representative, liquid, and tradable, it is widely considered Australia's preeminent benchmark index.
For Australians wanting to invest in the largest U.S. companies, there is no better way to do it than through the S&P 500. The S&P 500 index has been one of the best ways to invest and grow your wealth. Since its inception in 1957, the S&P 500 has averaged returns of about 10% per year.Is bond ETF worth buying? ›
If you plan to buy and sell frequently, bond ETFs are a good choice. For long-term, buy-and-hold investors, bond mutual funds, and bond ETFs can meet your needs, but it's best to do your research as to the holdings in each fund.Should I buy bonds when interest rates are high? ›
If your objective is to increase total return and "you have some flexibility in either how much you invest or when you can invest, it's better to buy bonds when interest rates are high and peaking." But for long-term bond fund investors, "rising interest rates can actually be a tailwind," Barrickman says.Is now a good time to buy bond funds? ›
Traders are now betting that global central bank tightening cycle will end soon, with cuts priced for the federal funds rate in 2023. If this narrative persists, we think yields will return to their recent lows. This means now could be a good time to buy bonds, particularly 2-year DM bonds, in the short to medium term.What happens to bond ETFs when interest rates fall? ›
Remember in certain recessionary scenarios, as yields fall, Bond ETF prices will rise. While the long term yield is known, short term returns can be higher than expected.Why are bonds losing money right now? ›
“The Federal Reserve raised rates more than they have in 40 years. That caused massive losses inside of bonds,” says Robert Gilliland, managing director at Concenture Wealth Management. “It's important to understand that bonds are generally secure, but not necessarily safe.”What are the risks of bond ETF? ›
For one thing, an investor's initial investment is at greater risk in an ETF than an individual bond. Since a bond ETF never matures, there isn't a guarantee the principal will be repaid in full. Furthermore, when interest rates rise, it tends to harm the price of the ETF, like an individual bond.Can you sell bond ETF at any time? ›
However, unlike individual bonds, most bond ETFs don't have a maturity date. And ETFs trade on an exchange, like stocks, so you can buy or sell them at any time during the trading day.What is the yield on a 5 year Australian bond? ›
The Australia 5 Years Government Bond has a 3.472% yield (last update 28 May 2023 11:15 GMT+0).What is the Australian 5 year bond rate? ›
The outlook for fixed income has become much more positive. Following central bank moves in 2022 and 2023, bonds now offer more attractive yields than they have in several years. Importantly, higher yields mean greater potential returns for investors.What will happen to i bond rates in 2023? ›
May 1, 2023. Series EE savings bonds issued May 2023 through October 2023 will earn an annual fixed rate of 2.50% and Series I savings bonds will earn a composite rate of 4.30%, a portion of which is indexed to inflation every six months. The EE bond fixed rate applies to a bond's 20-year original maturity.What is the outlook for bonds in 2023? ›
The Outlook for Bonds in 2023
One factor in bonds' favor is that bond yields are now at a level that can help retirees seeking income support a 4% retirement withdrawal rate. Beyond this, both individual bonds and bond funds could benefit if interest rates stabilize or decline.
The Australia Government Bond 10Y is expected to trade at 3.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 3.82 in 12 months time.What are risks with buying Australian Treasury bonds? ›
Interest rate risk – the risk that a change in interest rates could reduce the market value of the bond. If interest rates rise, bonds offering lower coupon payment rates become less attractive investments. Credit risk – the risk that the issuer could default or go insolvent.What is the 10 year bond rate in Australia? ›
The Australia 10 Years Government Bond has a 3.716% yield (last update 28 May 2023 2:15 GMT+0). Yield changed +11.4 bp during last week, +43.6 bp during last month, +46.7 bp during last year.What are the best performing ETFs in 2023 so far? ›
|Symbol||Fund name||5-year return|
|TAN||Invesco Solar ETF||23.72%|
|XSD||SPDR S&P Semiconductor ETF||21.78%|
|SMH||VanEck Semiconductor ETF||21.70%|
|SOXX||iShares Semiconductor ETF||20.68%|
|ETF||Ticker||Assets Under Management (AUM)|
|Vanguard S&P 500 ETF||(NYSEMKT:VOO)||$290.9 billion|
|Invesco QQQ Trust||(NASDAQ:QQQ)||$170.5 billion|
|Vanguard Growth ETF||(NYSEMKT:VUG)||$81.8 billion|
|iShares Core S&P Small-Cap ETF||(NYSEMKT:IJR)||$66.0 billion|
One of those exchange-traded funds, believe it or not, is the most famous ETF of all, the SPDR S&P 500 ETF Trust (SPY). Launched on Jan. 22, 1993, SPY has risen 828.3% since its inception. The other is a close cousin, the SPDR S&P Midcap 400 ETF Trust (MDY), with a 1,131% gain since its launch in 1995.What are the best bonds to buy in 2023? ›
|Bond ETF||30-Day SEC Yield|
|Vanguard Total Bond Market ETF (ticker: BND)||4%|
|iShares Core US Aggregate Bond ETF (AGG)||3.8%|
|US Treasury 2 Year Note ETF (UTWO)||4%|
|iShares U.S. Treasury Bond ETF (GOVT)||3.8%|
Investment-grade corporate bonds and government bonds such as US Treasurys have historically delivered higher returns during recessions than high-yield corporate bonds.What is the safest bond to invest in? ›
|Vanguard Short-Term Corporate Bond Index Fund||(NASDAQ:VSCSX)||5.2%|
|Guggenheim Total Return Bond Fund||(NASDAQ:GIBIX)||5.1%|
|Vanguard Total International Bond Index Fund||(NASDAQ:BNDX)||3.1%|
|Fidelity Short-Term Bond Fund||(NASDAQ:FSHBX)||4.3%|
The largest Global Ex-US ETF is the Vanguard Total International Stock ETF VXUS with $56.39B in assets.What is the most traded bond? ›
In the U.S., government bonds are known as Treasuries and are by far the most active and liquid bond market today.What is the best-performing ETF in Australia for 5 years? ›
- Global X EURO STOXX 50 ETF.
- Global X Physical Platinum.
- iShares Europe ETF.
- BetaShares Strong US Dollar Fund (Hedge Fund)
- Vanguard FTSE Europe Shares ETF.
- Liquidity and size in EFTs. Another aspect you should consider is liquidity. ...
- Counterparty risk in ETFs. Generally, ETFs can be split into two types: physical and synthetic. ...
- Diversification in ETFs. ...
- Before you invest in an ETF.
The exchange-traded fund (ETF) iShares S&P 500 ETF (ASX: IVV) could be one of the best ETF choices on the ASX for a long-term investment. There are some great reasons to consider the ETF at the moment, such as the fact that its share price is close to 10% lower than where it was in December 2021.What is the difference between Vanguard fund and ETF Australia? ›
The difference between the two is that a managed fund is not listed on a stock exchange, whereas an ETF is and thereby enables greater trading flexibility, liquidity and intraday pricing. Your choice will come down to which type of investment vehicle best suits you.What are the safest long term investments in Australia? ›
Bonds (corporate or government) are generally viewed as a safer option. Government bonds, in particular, are considered low-risk investments and offer a fixed return or 'yield' based on their current trading price.What ETF has the highest average return? ›
|QCLN||First Trust NASDAQ Clean Edge Green Energy Index Fund||19.24%|
|XLK||Technology Select Sector SPDR Fund||18.50%|
|VGT||Vanguard Information Technology ETF||17.75%|
|IYW||iShares U.S. Technology ETF||17.30%|
If Australian company taxes are already paid by the companies within an ETF, then investors don't need to pay those taxes again at the personal level. The corporate taxes paid are passed down to the Australian investor through tax credits (these are otherwise known as franking credits).How many ETFs should I invest in Australia? ›
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.How many ETFs does the ASX have? ›
|Fund Name||SPDR S&P/ASX Australian Bond Fund|
|Benchmark||S&P/ASX Australian Fixed Interest|
|Details||Tracks the performance of the Australian fixed rate bond market.|
|Index ETFs||Gold ETFs||Bond ETFs|
|Motilal Oswal NASDAQ 100 ETF||IDBI Gold ETF||Nippon ETF Long Term Gilt|
|HDFC Sensex ETF||Invesco India Gold ETF||SBI-ETF 10Y Gilt|
|SBI ETF Sensex||Aditya Birla Sun Life Gold ETF||LIC MF Government|
|Edelweiss ETF - NQ30||SBI ETF Gold||Nippon ETF Liquid BeEs|
- Lazard Select Australian Equity Fund (W Class) + 17.8%
- Lazard Defensive Australian Equity Fund + 13.77%
- Investors Mutual Equity Income Fund + 8.6%
- Lazard Australian Equity Fund (W Class) + 8.2%
- Allan Gray Australian Equity Fund (Class B) + 6.4%
Over the last three financial years it has achieved an average total return of 11.34% per annum. The next-highest diversified funds increase of 20.31% over 2020-21 was recorded by the Vanguard Diversified Growth Index ETF (VDGR).Which Vanguard Index Fund to buy Australia? ›
|ETF Name||Ticker Symbol||Distribution Yield|
|Vanguard MSCI Index Internation Shares (Hedged) ETF||VGAD||0%|
|Vanguard Diversified High Growth Index ETF||VDHG||4.79%|
|Vanguard Australian Fixed Interest Index ETF||VAF||0.75%|
|Vanguard Australian Government Bond Index ETF||VGB||0.72%|