BetaShares launches new bonds ETF

Australian fund manager, BetaShares, has announced the launch of its Australian Composite Bonds exchange traded fund (ETF) (OZBD), which provides access to a diversified portfolio of Australian bonds with potential for higher returns.

The fund will track the Bloomberg Australian Enhanced Yield Composite Bond Index, which weights bonds based on their risk-adjusted income potential to deliver higher returns than the commonly used Australian fixed income benchmark, the AusBond Composite Index.

OZBD also aims to maintain an overall duration and credit profile similar to the AusBond Index.

Alex Vynokur, CEO of BetaShares, said OZBD seeks to deliver a convenient and cost-effective method to invest in a diversified portfolio of high-quality Australian corporate and government bonds.

“OZBD has been designed to be a core portfolio allocation for fixed income for Australian investors and their advisers,” he said.

“OZBD’s intelligent investment approach seeks to avoid the shortcomings of traditional debt-weighted indices and aims to provide higher returns.

“The fund’s focus on income is particularly pertinent in a rising yield environment.”

OZBD’s index has outperformed the AusBond Index in the long-term and in the past ten financial years, offering a yield-to-maturity that is 0.65% p.a. higher as at 31 January 2021.