BetaShares has launched an exchange-traded fund (ETF) designed to give Australian investors access to long-dated bonds issued by governments of G7 countries.
The BetaShares Global Government Bond 20+ Year ETF aims to track an index providing investors with exposure to a portfolio of long-dated, income-producing sovereign bonds, selecting only G7 government bonds with a remaining term to maturity of more than 20 years.
BetaShares chief executive Alex Vynokur said: “We are excited to be able to give Australian investors the chance to invest in a diversified portfolio of high-quality global sovereign bonds. In previous share market downturns, government bonds historically have tended to rise in value.”
Forty per cent of the bonds invested in by the new ETF are rated AAA. As at 30 April, it had an average portfolio credit rating of AA.
“Our new fund makes the process of investing in global government bonds simple and cost-effective. It offers a robust option for gaining exposure to an important portfolio building block for investors seeking regular income, as well as a high-quality tool to defend portfolios,” Vynokur added.
The new ETF intends to pay quarterly income and has management costs of 0.22 per cent a year.
Last month, ETF Securities co-head of sales Kanish Chugh said ETFs had strengthened their standing among investors, despite experiencing significant scrutiny in line with the COVID-19-led volatility in equity markets around the world in February and March.
Earlier this year, a panel of industry stakeholders said advisers could minimise their compliance risk through the use of ETFs instead of picking individual stocks for clients wanting to invest directly on the Australian Securities Exchange.
