Key Highlights

  • The fund is about $1.43 billion in size and holds 250 companies and issuers.
  • Bonds make up 90% of the portfolio, with cash at 10%.
  • The management fee is 0.22%, and the listed annual Yield is 4.65%.
  • Australian issuers make up 66.32%, with Canada at 8.18% and Singapore at 7.44%.

VanEck Australian Floating Rate ETF (ASX:FLOT) tracks the Bloomberg AusBond Credit Floating Rate Note 0+ Year Index, holding floating rate notes issued mainly by Australian banks and corporates. The units were listed at $24.93, the fund is about $1.43 billion in size, and the management fee is 0.22%. Floating rate notes pay coupons that reset with short-term rates, which keeps the unit price less sensitive to rate moves than a fixed-rate bond fund.

Ticker

ASX:FLOT

Listed price

$24.93

Fund size

$1.43 billion

Management fee

0.22%

Listed annual yield

4.65%

Benchmark

Bloomberg AusBond Credit FRN 0+Y TR AUD

Holdings

250 companies

Portfolio make-up

Bonds make up 90% of the fund, with cash at 10%. Australia accounts for 66.32%, Canada for 8.18%, Singapore for 7.44%, the Netherlands for 4.37% and France for 3.11%. The largest holdings are bank floating rate notes, including Westpac at 1.72% and 1.46%, National Australia Bank at 1.46%, ANZ at 1.42% and 1.38%, and Commonwealth Bank at 1.15%.

The top ten holdings make up 13.71%, and the fund also holds the VanEck Cash Plus Active ETF at 1.51%.

Income and costs

The listed annual yield is 4.65%, and the management fee is 0.22%. Coupons reset with short-term rates, so income tends to follow the cash rate and the fund's yield changes as rates move.

Risks to weigh

Floating rate structures reduce duration risk, which is the main benefit. Credit risk remains, because the notes are issued by banks and corporates, and spreads can widen in stressed markets. The cash component and the fund's holding in another VanEck ETF add small layers of exposure that investors should note. Income will fall if short-term rates decline.

Final Word

The VanEck Australian Floating Rate ETF is built to keep rate sensitivity low by holding floating rate notes. Its income follows short-term rates, and its main remaining risk is credit exposure to the issuers in the portfolio.