In response to substantial growth in the fixed income ETF market - which has attracted unprecedented net flows over the past year – BetaShares has launched the Global Aggregate Bond Currency Hedged ETF (ASX: WBND).
The Australian investment management company expects its new ETF will attract Australian investors who have a growing appetite for diversified fixed income solutions.
The launch follows on the heels of the decision by central banks around the world to enter a rate-easing cycle, resulting in more interest in cash and fixed income ETFs with net flows reaching close to nearly $10 billion over the past financial year.
The Global Aggregate Bond Currency Hedged ETF is designed to track the Bloomberg Global Aggregate Index (AUD Hedged), which comprises over 30,000 investment-grade bonds from more than 3,100 issuers across 70 countries and 25 currencies.
The index is also the official APRA performance benchmark for international fixed interest used by superannuation funds.
The fund is currency-hedged into the Australian dollar, employing taxation of final arrangements (TOFA) hedging to enhance after-tax outcomes and create more consistent distribution profiles for investors.
According to BetaShares CEO Alex Vynokur, this new ETF is intended to serve as a core building block for Australian investors looking to gain exposure to global fixed income assets.
“WBND is a cost-effective way to invest in a diversified portfolio of investment grade global bonds and is designed for the unique needs of local investors,” Vynokur said.
Vynokur also told investors that WBND is the only ETF that tracks the official APRA benchmark for the asset class and is constructed with more efficient after-tax outcomes, as well as smoother cash distribution profiles, for Australian investors in mind.
"Our market leadership in cash and income ETFs allows us to leverage our scale and understanding of Australian investors to help them meet their wealth creation goals.”
The launch of this new ETF comes at a time of significant demand for fixed income ETFs on the Australian market.
Betashares has over $14 billion in funds under management across cash and fixed income ETFs, and about $50 billion in assets under management across all offerings.
Net assets are $1 billion, while NAV as of today is $50/unit.
The stock was trading today at $50.05.
Key facts
* Management fees and costs: (p.a.) 0.19%
* Distribution frequency: quarterly
* Distribution Reinvestment Plan (DRP): Full or partial participation available
* Domicile: Australia
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
