Jing Jia
5 minutes reading time
Financial intermediary use only. Not for distribution to retail clients.
Returns and fund facts as at 30 June 2026.
The CRED Australian Investment Grade Corporate Bond ETF is built on a simple idea: own the part of the Australian corporate bond market that pays you best for the risk you take. In practice:
- The sweet spot of the corporate curve. CRED concentrates in the steepest, best-rewarded part of the curve, where each extra year of maturity earns the most additional yield, spread and roll-down. It selects senior investment grade corporates on risk-adjusted yield, rather than weighting by who has issued the most debt.
- Active techniques, passive fees. It captures what an active manager would do to add value, such as participating in primary deals and trading efficiently, for passive fees of 0.25% a year.
- Execution alpha. Over three years CRED returned 7.11% p.a., within two basis points of its index at 7.12%, with execution offsetting most of the management fee.
- Delivering strong performance despite rising rates. The Australian 10-year government yield rose around 70 basis points over the three years, a clear headwind for a fund with roughly six years of duration. Yet CRED’s return was driven by credit premia, carry and roll-down, not by a fall in rates.
| Total return to 30 Jun 2026 | 1 yr | 3 yrs p.a. | 5 yrs p.a. | 10 yrs p.a. |
| CRED | 2.72 | 7.11 | 1.39 | – |
| CRED’s Index | 2.83 | 7.12 | 1.46 | 3.60 |
| AusBond Credit 0+ | 2.75 | 5.53 | 2.04 | 3.10 |
| AusBond Composite 0+ | 1.53 | 3.98 | 0.37 | 1.77 |
| Fund A | 2.60 | 5.39 | 1.89 | 2.91 |
| Fund B | 2.63 | 6.12 | 1.62 | – |
| Fund C | 3.95 | 4.77 | -0.21 | 1.84 |
Fund A to C are comparable ASX-listed Australian corporate bond ETFs. CRED since inception (May 2018): 3.44% p.a. Source: Bloomberg total return, to 30 June 2026. Past performance is not indicative of future performance.
Dialing duration with HCRD
CRED carries about six years of interest rate duration. Investors who want the credit but not the rate exposure can use the HCRD Interest Rate Hedged Australian Investment Grade Corporate Bond ETF , which holds the same bonds and hedges almost all of that duration out with government bond futures, adding a structural steepener carry along the way. Interest rate moves drive roughly 80% of the volatility of fixed-rate credit, so removing them makes a large difference: over the past decade the duration-hedged index returned about 4.6% p.a. against 3.6% for the CRED index, at roughly a third of the volatility, by avoiding the worst of the 2022 rate sell-off while keeping the same credit return.
Spread-duration risk: HCRD hedges interest rate risk, not credit risk. It keeps CRED’s full credit exposure, with a spread duration of about six years, so HCRD can still fall in value if credit spreads widen.
Held together, CRED and HCRD become a precise tool for setting duration. Each quarter the blend’s weights are reset so its interest rate duration matches a chosen target, while credit exposure stays fully invested. Matched to the broad Australian credit market, around 3.4 years, the blend would have returned about 7.4% p.a. since November 2022 against 5.1% for that market: at the same interest rate risk you hold more credit, which is both where the extra return comes from and, as noted above, the risk you take on.
Fund facts
| Fund facts | CRED | HCRD |
| Management cost (p.a.) | 0.25% | 0.29% |
| Fund size | $1.83bn | $314m |
| Inception | 31 May 2018 | 14 Nov 2022 |
| Distributions | Monthly | Monthly |
| Average credit rating | BBB+ | BBB+ |
| Yield to maturity (p.a.) | 5.98% | 5.88% |
| Modified (interest-rate) duration | 6.10 yrs | 0.05 yrs |
| Spread (credit) duration | 6.10 yrs | 5.79 yrs |
Source: Betashares website fund pages, as at 30 June 2026. Yields are point-in-time and will vary.
Important information
CRED’s Index is the Solactive Australian Investment Grade Corporate Bond Select TR Index (SOLAUSIG).
HCRD’s Index is the Solactive Australian Investment Grade Corporate Bond Select DH Index (SOLASIGH).
Issued by Betashares Capital Ltd (AFSL 341181). General information only; it does not take into account any person’s objectives, financial situation or needs. Past performance is not indicative of future performance. Index returns are not fund returns and do not reflect fees; figures before each index or fund live date are back-tested and simulated. Fund A to C use Bloomberg total-return data and may differ from each issuer’s published returns. Yields are point-in-time and will vary. There are risks associated with an investment in CRED and HCRD, including market, interest rate, credit and index-tracking risk; the value of an investment can fall as well as rise. An investment should be considered as part of a broader portfolio, taking into account your tolerance for risk. Read the Product Disclosure Statement and Target Market Determination at betashares.com.au and consider whether the product is right for you.