Key Highlights

  • AEBD tracks the Bloomberg Australian Enhanced Yield Ethically Screened Composite Bond index and applies an ethical screening overlay to its bond selection.
  • The fund's portfolio spans 282 companies, with the top 10 holdings representing only 13.48% of total assets.
  • AEBD reported an annual yield of 4.13%, with distributions rising from $0.170 in June to $0.207 in September.
  • Geographic exposure extends beyond Australia to Canada, Germany and supranational issuers, which together account for a meaningful share of the portfolio.

Fund Overview and Objective

AEBD was admitted to the ASX on 6 November 2024 and falls under the Bonds - Australia category. The fund seeks to track the Bloomberg Australian Enhanced Yield Ethically Screened Composite Bond Index before fees and expenses, carrying a management fee of 0.34% per annum, positioning it toward the higher end of fee levels among the funds reviewed.

Portfolio Composition

The fund's asset allocation was reported entirely in bonds at 100.00%, with no cash or Equity exposure recorded. AEBD held a broad base of 282 companies, a considerably larger number than several comparable funds, with the top 10 holdings accounting for just 13.48% of the portfolio.

Leading positions included British Columbia (Province of) 5.2% notes at 2.26%, MTR Corp 5.582% notes at 1.44% and Airservices Australia 5.35% notes at 1.41%, alongside several tranches of Australian Commonwealth Government Loans.

Geographic Exposure

Australia represented 62.06% of the portfolio, a lower domestic concentration than several peer funds, reflecting AEBD's broader international scope. Supranational issuers made up 13.50% of exposure, followed by Canada at 7.08% and Germany at 4.46%, with smaller allocations to the Netherlands, New Zealand, Hong Kong, Norway, Spain and the United States.

Distribution and Yield Profile

AEBD's annual yield stood at 4.13% on an interim distribution basis. The fund's monthly distribution figures increased over the period under review, from $0.050 in May to $0.170 in June, $0.175 in July, $0.195 in August and $0.207 in September, representing one of the more pronounced upward distribution trends among the funds examined.

Conclusion

AEBD's ethical screening mandate, combined with its comparatively wide holdings base of 282 companies and reduced reliance on the top 10 positions, sets it apart from more concentrated domestic bond funds. Its distribution trend across the period reviewed showed consistent monthly increases, while its geographic spread beyond Australia into supranational, Canadian and German issuers reflects the composite nature of the underlying benchmark.