State Street Global Advisors (SSgA) has rolled out two new SPDR exchange traded funds (ETFs) giving investors easier access to the Australian bond market.
The SPDR S&P/ASX Australian Bond Fund and the SPDR S&P/ASX Australian Government Bond Fund started trading on the Australian Securities Exchange (ASX) this morning.
The new ETFs, which invest in Australian government, semi-government and corporate bonds, are indented to give retail investors exposure to markets which have traditionally been difficult and costly to access.
“The volatility in global markets in recent years has given many investors cause to diversify their portfolios by adding defensive investments like bonds,” SSgA head of SPDR ETFs Amanda Skelly said.
“The advent of fixed-income ETFs this year marks a milestone for retail investors – especially those seeking to add more stability to their self-managed super fund portfolios – as they offer simple, safe and transparent access to high quality fixed income assets which generate a regular and largely predictable income stream.”
SSgA Asia Pacific head of fixed income Kheng-Siang Ng said that investors should consider exposure to fixed income in the current volatile market.
“By including fixed income in a portfolio you have an asset class whose risk/return characteristics are less correlated to equities markets,” he said.
The S&P/ASX Australian Government Bond Index is made up of 53.1 per cent government bonds and 46.9 per cent semi -government bonds.
The S&P/ASX Australian Fixed Interest Index comprises 36.3 per cent government bonds, 32 per cent semi-government bonds, 21.5 per cent supranational/sovereign bonds and 10.2 per cent corporate bonds.
