Specialist fund manager BetaShares has released a new exchange-traded fund (ETF) providing investors with access to United States Treasury bonds.
More specifically, the new fund will be tracking the S&P US Treasury 20+ Year AUD Hedged Bond Index. The underlying asset for the ETF will be a portfolio of high-quality, long-maturity fixed income instruments issued by the US government.
The fund will be trading on the Australian Securities Exchange under the GGOV ticker.
BetaShares has launched the ETF to provide investors with a source of capital protection given US Treasury bonds have very low risk of default and as such are of the highest credit quality.
This characteristic is reflected in the allocations to these assets from pension and sovereign funds around the world and many central bank reserves.
According to the manager, US Treasury bonds have historically performed well during times of economic market weakness across the world, such as those prevailing now, and US recessions and this track record should provide investors with meaningful portfolio diversification should they hold an allocation to this asset class.
Further, it noted these fixed income instruments have been a solid source of income that are above long-term inflationary expectations.
“GGOV is a simple-to-access and cost-effective solution for investing in long-term US Treasury bonds – an exposure that many leading global investors use to diversify and defend their portfolios during periods of global economic slowdown. It also offers investors the potential for regular income, particularly as US interest rates and inflation expectations continue to both rise,” BetaShares chief executive Alex Vynokur noted.
“We’re pleased to offer this important portfolio building block to investors via a familiar ETF structure as part of BetaShares’ leading cash and fixed income range of ETFs on the Australian market. The launch of this US Treasury bond ETF is another important step on our ongoing journey to evolving this range for the benefit of Australian investors and their advisers.”
The manager recently launched an ETF that invests in sustainably sourced food.
