Key Highlights

  • The fund holds 742 companies and issuers, with the top ten making up 10.99% of the portfolio.
  • Australian issuers make up 67.49%, with supranational issuers at 11.82%.
  • The management fee is 0.19%, and the listed annual Yield is 4.67%.
  • The fund is about $1.61 billion in size and is fully invested in bonds.

Betashares Australian Composite Bond ETF (ASX:OZBD) tracks the Bloomberg Australian Enhanced Yield Composite Bond Index, giving investors a broad mix of Australian and international bonds. The units were listed at $43.46, the fund is about $1.61 billion in size, and the management fee is 0.19%. The index's enhanced yield focus means the portfolio includes a wider range of issuers than a traditional government-led bond fund.

Ticker

ASX:OZBD

Listed price

$43.46

Fund size

$1.61 billion

Management fee

0.19%

Listed annual yield

4.67%

Benchmark

Bloomberg Aus Enh Yld Comp Bond TR AUD

Holdings

742 companies

Portfolio make-up

Bonds make up 100% of the fund. Australian issuers account for 67.49%, followed by supranational issuers at 11.82%, Canada at 5.22%, the United States at 3.09%, Germany at 2.78% and the Netherlands at 1.38%. The top ten holdings include supranational bonds issued by the International Bank for Reconstruction and Development, Commonwealth Bank bonds and Commonwealth government bonds, each at about 1% to 1.2% of the fund.

The top ten make up 10.99% of the portfolio, so the fund's risk is spread across a large number of issuers.

Income and costs

The listed annual yield is 4.67%, and the management fee is 0.19%. The yield is higher than broad government bond funds, reflecting the inclusion of corporate and supranational bonds that pay more than Commonwealth issues.

The fund's Diversification across 742 holdings makes it less exposed to any one issuer than funds built around a smaller index.

Risks to weigh

Like all bond funds, the unit price is sensitive to interest rates, and the corporate portion adds Credit risk. Enhanced yield indices can include lower-rated securities, and those holdings are more likely to lose value in a downturn. Investors should weigh the higher yield against those credit characteristics.

Final Word

The Betashares Australian Composite Bond ETF offers a broad, diversified bond portfolio with a higher yield than government-only funds. The trade-off is additional credit exposure, which investors should consider alongside the income on offer.