QPON - BetaShares Australian Bank Senior Floating Rate Bond ETF

[qldfrog]

Dear all, just for your information;
I found this new EFT interesting as a nicer and safer? way to park cash than a term deposit, without the usual bond risk, and reducing any potential interest rate rise.Any other opinion?

 

[qldfrog]

https://www.betashares.com.au/fund/australian-bank-floating-rate-bond-etf/
for the actual EFT site

 

[thembi]

https://www.betashares.com.au/fund/australian-bank-floating-rate-bond-etf/
for the actual EFT site

I use ETFs a great deal in my investing and find them a convenient way to get exposure to chosen investment strategies. I certainly think that investors who are looking for fixed income investors could do worse than to consider a floating rate bond exposure. As you say, fixed income using fixed rates are destined to fall in price when interest rates eventually rise, with floating rate bonds, you have none of this risk and will benefit from interest rate rises. The rate at 2.90% p.a. looks reasonably attractive and comparable with term deposits, and the fact that you don't have to lock up capital like TDs is useful.

 

[qldfrog]

I use ETFs a great deal in my investing and find them a convenient way to get exposure to chosen investment strategies. I certainly think that investors who are looking for fixed income investors could do worse than to consider a floating rate bond exposure. As you say, fixed income using fixed rates are destined to fall in price when interest rates eventually rise, with floating rate bonds, you have none of this risk and will benefit from interest rate rises. The rate at 2.90% p.a. looks reasonably attractive and comparable with term deposits, and the fact that you don't have to lock up capital like TDs is useful.

my thoughts as well so I do owe some.Probably not a big requirement to disclose for an EFT but just so that people know.

 

[Dona Ferentes]

Some $690 million of net assets under issue. Average credit rating A+. Returns are skinny .... running yield 0.74%pa and all-in yield 0.52 percent

Mgmt Costs** (% p.a.)	0.22%
Distribution Frequency	Monthly

Top 10 holdings

COMMONWEALTH BANK OF AUSTRALIA FRN JAN-24	10.5
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD FRN AUG-24	10.5
NATIONAL AUSTRALIA BANK LTD FRN AUG-26	10.5
WESTPAC BANKING CORP FRN AUG-24	10.4
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD FRN JAN-25	10.4
BANK OF QUEENSLAND LTD FRN OCT-26	5.9
MACQUARIE BANK LTD FRN DEC-25	5.2
BENDIGO & ADELAIDE BANK LTD FRN DEC-25	5.2
NATIONAL AUSTRALIA BANK LTD FRN FEB-27	4.9
COMMONWEALTH BANK OF AUSTRALIA FRN AUG-23	4.6

 

[divs4ever]

Some $690 million of net assets under issue. Average credit rating A+. Returns are skinny .... running yield 0.74%pa and all-in yield 0.52 percent

Mgmt Costs** (% p.a.)	0.22%
Distribution Frequency	Monthly

Top 10 holdings

COMMONWEALTH BANK OF AUSTRALIA FRN JAN-24	10.5
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD FRN AUG-24	10.5
NATIONAL AUSTRALIA BANK LTD FRN AUG-26	10.5
WESTPAC BANKING CORP FRN AUG-24	10.4
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD FRN JAN-25	10.4
BANK OF QUEENSLAND LTD FRN OCT-26	5.9
MACQUARIE BANK LTD FRN DEC-25	5.2
BENDIGO & ADELAIDE BANK LTD FRN DEC-25	5.2
NATIONAL AUSTRALIA BANK LTD FRN FEB-27	4.9
COMMONWEALTH BANK OF AUSTRALIA FRN AUG-23	4.6

although i have invested in bank ( and building society ) hybrids , bonds and preference shares before ( Basel III ) i am averse to 'sausage debt ' ( learning the lessons from The Big Short and CDOs ) i prefer to select them individually

but yes the returns are too skinny for me i would be wanting nearer 10% pa ESPECIALLY for any tier 1 debt tucked away in there

and FRN is a trailing increase which means you never keep pace with rising inflation ( and when interest rates tumble they tend to redeem your bonds to limit your upside at that time )