VanEck extends subordinated debt ETF range via fixed rate offering

Yasmine Raso

Senior Journalist, Financial Newswire

9 December 2025

VanEck has unveiled its latest addition to its suite of exchange traded funds (ETFs), a new Australian fixed-rate subordinated debt offering designed to ‘complement’ its existing floating rate strategy.

Set to launch on 12 December, the VanEck Australian Fixed Rate Subordinated Debt ETF (FSUB) grows the ETF specialist’s fixed income universe and expands on the success of the existing VanEck Australian Subordinated Debt ETF (SUBD) which first launched in 2019 and has since surpassed $3 billion in total assets.

Leveraging SUBD’s ability to offer investors first-of-its-kind direct access to floating rate subordinated bonds issued by financial institutions, including the big four banks, FSUB taps into the same “regulatory capital framework” but allows investors to diversify their exposure with fixed-rate opportunities.

“The Australian subordinated debt market has grown to over $70 billion, with nearly half of new issuance now fixed-rate,” Arian Neiron, CEO and Managing Director of VanEck Asia Pacific, said

“APRA’s mandated total loss absorbing capacity (TLAC) requirements for banks and other authorised deposit-taking institutions are driving continued Tier 2 issuance (~$15 billion per year), and the imminent phase-out of hybrid securities has accelerated the structural shift towards subordinated debt.

“Financial institutions have shifted Tier 2 capital issuance to both floating and fixed rate to accommodate increased investor appetite for defined income and duration exposures. The launch of FSUB gives investors a complete subordinated debt solution.

“With the Australian yield curve steepening recently and the 10-year bond yield at a 12-month high, we think FSUB is well-positioned, offering investors the opportunity to access a fixed rate bonds portfolio that is currently yielding around 5.7 percent.”

In the calendar year-to-date, SUBD has recorded more than $1 billion in net flows. Once launched, FSUB takes VanEck’s share of ETF listings on the Australian Securities Exchange to 48.