Global X reduces fees on fixed income ETFs

Yasmine Raso

Senior Journalist, Financial Newswire

12 October 2022

Freshly rebranded Global X ETFs, formerly ETF Securities, has announced management fee cuts on two of its U.S. fixed income exchange traded funds (ETFs), to help investors gain better access the U.S. fixed income market.

The management fee for the Global X US Treasury Bond ETF (Currency Hedged) has decreased from 0.3 per cent to 0.2 per cent, and the fee for the Global X USD High Yield Bond ETF (Currency Hedged) reduced from 0.55 per cent to 0.4 per cent.

Evan Metcalf, chief executive of Global X ETFs Australia, said the fee cuts were part of a broader review of Global X’s product range and will ensure investors can access diverse investment areas efficiently and cost-effectively.

“We are determined to offer our clients cost-efficient access to tactical and strategic solutions,” he said.

“We understand fixed income markets globally are difficult given the toll inflation and coordinated central banks rate action is taking on markets and the broader economy. But we see opportunities.

“Despite the scale of this market, Australian retail investors had no access to a pure play investment in US Treasuries until the Global X ETF was launched in July.

“As the Reserve Bank of Australia slows its rate increases, there have been calls that inflation may be nearing or at its peak, creating opportunities to start allocating back to fixed income.

“At the same time, the US Fed is maintaining its hawkish stance on rate increases and is steadfast on curbing inflation. We see this presenting potential market dislocations which our investors can leverage.”

The Global X US Treasury Bond ETF (Currency Hedged) tracks the iBoxx $ Treasuries Total Return Index and provides access to the U.S. government debt market with over US$23 trillion in owing Treasuries.

The Global X USD High Yield Bond ETF (Currency Hedged) tracks the Solactive USD High Yield Corporates Total Market Index and offers investors access to the sub-investment grade segment of the global bond market.