Key Highlights

  • The fund is actively managed and holds 517 companies and issuers.
  • Australia accounts for 77.90% of the portfolio, with bonds at 97.92%.
  • The management fee is 0.42%, and the listed annual Yield is 4.73%.
  • The top ten holdings make up 14.64% of the fund, mostly Commonwealth and state government bonds.

Betashares Western Asset Aus Bond Active ETF (ASX:BNDS) is an actively managed fund that invests in Australian fixed-interest securities, with the aim of capturing returns from Interest Rate positioning, sector allocation and security selection. The units were listed at $23.02, and the management fee is 0.42%. Its benchmark is the Bloomberg AusBond Composite 0+ Year Index, which the manager uses as a reference rather than a fixed rulebook.

Ticker

ASX:BNDS

Listed price

$23.02

Management fee

0.42%

Listed annual yield

4.73%

Benchmark

Bloomberg AusBond Composite 0+Y TR AUD

Holdings

517 companies

Portfolio make-up

Bonds make up 97.92% of the fund, with cash at 2.08%. Australia accounts for 77.90%, followed by New Zealand at 3.71%, Canada at 3.45%, the United Kingdom at 2.47%, Germany at 2.16% and supranational issuers at 1.93%. The largest holdings include a Commonwealth Loan security at 2.08%, New South Wales Treasury Corporation bonds at 1.62%, 1.29% and 1.28%, and Australian Commonwealth Government Bonds at 1.61% and 1.25%.

The top ten holdings make up 14.64% of the fund, with the remainder spread across 507 other issuers. Turnover is reported at 21.70%, which reflects the manager's active trading.

Income and costs

The listed annual yield is 4.73%, and the management fee is 0.42%. The fee is higher than passive bond index funds, and investors are paying for the manager's security selection and positioning decisions. The listing gives no separate figure for trading costs arising from the turnover.

Risks to weigh

The fund's results depend on the manager's choices, and an active approach can underperform its benchmark. Interest rate positioning is a central part of the strategy, so a wrong call on rate direction would reduce the unit price. Credit exposure to corporate issuers adds the risk of spread widening, and the portfolio's breadth does not remove market-wide pressure on bond prices.

Final Word

The Betashares Western Asset Aus Bond Active ETF offers a broad Australian bond portfolio managed on an active basis, at a higher fee than passive index funds. Its results will depend on the manager's rate and security decisions as much as on market direction.