Key Highlights

  • The fund holds 98.14% bonds, spread across 469 companies and issuers.
  • Australian issuers make up 53.41% of the portfolio, with Canada at 10.49% and the United States at 5.49%.
  • The management fee is 0.15%, and the listed annual Yield is 4.59%.
  • The top ten holdings represent 8.15% of the fund, reflecting a wide spread of issuers.

iShares Core Corporate Bond ETF (ASX:ICOR) tracks the Bloomberg AusBond Credit 0+ Year Index, giving investors exposure to a wide range of corporate bonds. The units were listed at $93.99, the fund size is about $527 million, and the management fee is 0.15%. Corporate bonds generally pay more than Government Bonds to compensate for credit risk, and that trade-off defines how this fund behaves.

Ticker

ASX:ICOR

Listed price

$93.99

Fund size

$527 million

Management fee

0.15%

Listed annual yield

4.59%

Benchmark

Bloomberg AusBond Credit 0+ Yr

Holdings

469 companies

Where the credit exposure sits

Bonds make up 98.14% of the fund, with cash at 1.86%. Australian issuers account for 53.41%, followed by Canada at 10.49%, the United States at 5.49%, the Netherlands at 4.87% and Germany at 3.98%. Issuers in the United Kingdom, France and New Zealand make up most of the remainder.

The largest holdings are Canada Pension Plan Investment Board bonds, including positions at 1.34% and 1.20%, followed by Westpac Banking Corporation at 0.78%. The top ten holdings account for 8.15% of the fund, a low concentration that spreads the credit risk across many issuers.

Income and costs

The listed annual yield is 4.59%, which is higher than the yield on a government-only bond fund. The management fee is 0.15%. The higher yield is a reward for taking on credit risk, not a guaranteed return.

On the day of the listing data, the quoted bid and offer range was unusually wide, which suggests thin trading in the units at that moment. Investors placing orders should check the prevailing prices closely.

Risks to weigh

Corporate bonds carry two main risks. The first is Interest Rate risk, which can push prices down when rates rise. The second is credit risk, where the value of individual bonds can fall if the issuer's financial position deteriorates. Credit spreads can also widen in a downturn, which lowers unit prices even when government yields are stable.

Liquidity is a further consideration, because some corporate bonds trade less often than government securities. The fund's Diversification reduces the effect of any one default, but it does not remove the broader pressure on credit markets.

Final Word

The iShares Core Corporate Bond ETF offers a higher-yielding route into Australian and global corporate debt, with a low issuer concentration. The trade-off is greater exposure to credit spreads and occasional trading gaps, which investors should weigh alongside the income on offer.