Key Highlights

  • The fund is actively managed and holds 100 companies and issuers.
  • Bonds make up 97.40% of the portfolio, and the top ten holdings represent 54.47%.
  • The management fee is 0.29%, and the listed annual Yield is 5.59%.
  • The listing classifies 78.77% of the portfolio under the United States, although the largest holdings are Australian bank issuers.

Macquarie Subordinated Debt Active ETF (ASX:MQSD) aims to outperform the Bloomberg AusBond Bank Bill index over rolling three-year periods, before fees, while providing regular monthly distributions. The units were listed at $49.93, and the management fee is 0.29%. The fund invests in subordinated bonds, which typically offer more yield than cash or senior Investment grade bonds but rank below senior debt if an issuer fails.

Ticker

ASX:MQSD

Listed price

$49.93

Management fee

0.29%

Listed annual yield

5.59%

Benchmark

Bloomberg AusBond Bank 0+Y TR AUD

Holdings

100 companies

Portfolio make-up

Bonds make up 97.40% of the fund, with stocks at 1.45%, cash at 0.61% and other Assets at 0.55%. The top ten holdings make up 54.47% of the portfolio. The largest positions are Australia and New Zealand Banking Group at 8.01%, National Australia Bank at 6.51%, Macquarie Bank at 5.91%, QBE Insurance at 5.78% and Westpac at 5.76%.

The listing classifies 78.77% of the fund under the United States and 21.23% under Australia. The largest named holdings are Australian bank and insurance issuers, so the geographic figure reflects how the holdings are classified rather than their home markets. Investors should read the holdings list directly before drawing conclusions about exposure.

Income and costs

The listed annual yield is 5.59%, and the management fee is 0.29%. Subordinated bonds are typically priced to offer more yield than senior bonds, and the fund's monthly distribution aims to pass that income on to investors.

Risks to weigh

Subordinated debt is more vulnerable than senior debt when an issuer runs into difficulty, and some securities can defer coupons. The fund is actively managed, so its results depend on the manager's selections as well as market conditions. Concentration in a small number of issuers adds further risk.

Final Word

The Macquarie Subordinated Debt Active ETF offers an actively managed route into subordinated bonds with a monthly distribution focus. The higher yield compensates for lower seniority, and the concentration in a few issuers is the main point for investors to weigh.