VanEck launches bond ETFs

VanEck has announced the launch of three Australian government bond exchange traded funds (ETFs) in September which will offer investors different maturity profiles.

The firm’s chief executive, Arian Neiron, described the new offering as the “first of a kind ETF product suite in Australia” as it will comprise a variety of Australian government bonds at varying maturity levels.

The new VanEck’s suite of ETFs includes:

• VanEck 1-5 Year Australian Government Bond ETF (ASX code: 1GOV) – a portfolio of Australian government bonds which have maturity dates between 1 and 5 years.
• VanEck 5-10 Year Australian Government Bond ETF (ASX code: 5GOV) – a portfolio of Australian government bonds which have maturity dates between 5 and 10 years.
• VanEck 10+ Year Australian Government Bond ETF (ASX code: XGOV) – a portfolio of Australian government bonds which have maturity dates between 10 and 20 years.

Neiron said that each ETF would be a portfolio of Australian government and semi-government bonds and investors would be able to position their portfolios using these new ETFs to minimise the impact of rising rates by shortening bond duration and vice versa.

Year-to-date Australian fixed income exchange traded products (ETPs) have attracted $2.6 billion in assets.

“We anticipate greater demand for fixed income as central banks have pushed nominal yields higher,” Neiron said.

“There is almost $15 billion out of $156 billion AuM in Australian fixed income and we see this segment of the market doubling in the next three years.”