VanEck has unveiled three new exchange-traded funds (ETF) focusing on Australian government bonds, offering investors a way to manage their fixed income investments amid economic uncertainty.
The VanEck 1-5 Year Australian Government Bond ETF (1GOV), VanEck 5-10 Year Australian Government Bond ETF (5GOV) and VanEck 10+ Year Australian Government Bond ETF (XGOV) are scheduled to be available on the Australian Securities Exchange (ASX) from 28 September.
VanEck Asia-Pacific chief executive Arian Neiron said the launch will introduce a distinctive suite of ETFs to the Australian market, coinciding with the growing trend of fixed income investments.
“Year-to-date Australian fixed income exchange-traded products have attracted $2.6 billion in assets. We anticipate greater demand for fixed income as central banks have pushed nominal yields higher,” Neiron said.
“There is almost $15 billion out of $156 billion assets under management in Australian fixed income and we see this segment of the market doubling in the next three years.”
He added the ETFs will provide investors with the necessary tools to manage their bond portfolios by targeting specific segments of the yield curve, thereby helping them navigate the potential impact of rising interest rates.
“Our offering of Australian government bonds comes to market at a time when investors are seeking capital stability in a period of significant equity market volatility,” he said.
“Each ETF will be a portfolio of Australian government and semi-government bonds. The Australian government and its state and territories’ treasury corporations are highly rated and provide dependable income.
“Investors can position their portfolios using our new ETFs to minimise the impact of rising rates by shortening bond duration and vice versa.”
The launch of the suite will expand VanEck’s existing portfolio of 33 ETFs currently offered on the ASX following the release of a US Treasury bond ETF in May.