Global fund manager Vanguard has launched an ETF made up of a portfolio of 260 Australia-issued corporate bonds.
The Vanguard Australian Corporate Fixed Interest Index ETF was launched on the ASX this week.
The ETF invests in issues by the big Australian banks, Norway's Kommunalbanken, GE Capital Australia Funding and Apple.
The new fixed interest ETF, with the ASX ticker VACF, is an additional unit class of the existing managed fund, the Vanguard Australian Corporate Fixed Interest Index Fund.
Vanguard Australia's head of fixed income, Stephen Howard, said the ETF provides more options for Australian investors to "tailor their defensive asset allocations in a low-cost and diversified manner".
"Last year, we saw international fixed income enter the Australian ETF space, and that will prove to be an important element in many portfolios as investors' appreciation of that asset class grows," Mr Howard said.
"Now that all the major asset classes are covered by ETFs in Australia, providing investors with options for more nuanced use of fixed income was a logical next step.
"Until now, there has been a lack of fully diversified corporate credit ETFs on the market, and investors have largely had to look to the managed fund space to serve that requirement in their portfolios," he said.
"For investors concerned about interest rate risk, corporate bonds can also be a welcome addition to their portfolios. Because of their shorter maturity dates, corporate bonds tend to suffer less from the devaluations that come when interest rates rise, which impact the value of fixed interest assets," Mr Howard said.
Wealth management relationships are under threat as clients look to switch providers driven by the impact of the royal commission. ...
S&P Dow Jones has announced a new addition to its global ESG index using enhanced ESG scores and granular data. ...
Investor confidence is on the rebound and the ASX hit a 12-year high on Monday. But it’s not all good news for the Australian economy. ...