Australian Major Bank Subordinated Debt ETF

BSUB

Earn attractive monthly income from high quality subordinated bonds issued by the ‘big 4’ Australian banks.

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Overview

Fund Objective

BSUB aims to track the performance of an index (before fees and expenses) that provides exposure to a portfolio of floating rate subordinated bonds issued by the four major Australian banks.

Fund Strategy

The Fund’s strategy is to invest in Tier-2 floating rate subordinated bonds denominated in Australian dollars, issued by the ‘big 4’ Australian banks. Eligible bonds must have amounts outstanding of at least $500 million and a remaining maximum term to maturity of 10 years.

The Fund can hold a maximum of 16 securities. If there are 10 or more securities, market value weighting is applied with an issuer cap of 35% per issuer. If there are fewer than 10 securities, equal weighting is applied.

Benefits of BSUB

  • Attractive income, paid monthly

    Subordinated debt offers the opportunity for attractive income typically above that of senior bank floating rate notes.

  • High quality issuers

    The “big 4” Australian banks (CBA, ANZ, NAB and Westpac) are generally considered some of the best capitalised major financial institutions in the world. BSUB allows investors to obtain exposure to investment grade subordinated bonds from all four banks in a single trade.

  • Diversification benefits, protection against rising interest rates

    Historically, major bank tier 2 floating rate bonds have generally exhibited low correlation to equities and a high degree of capital stability, providing potential portfolio diversification benefits. In addition, the income paid by floating rate bonds varies in line with a benchmark interest rate. If the benchmark rate increases, so too does the income you receive, and vice versa.

There are risks associated with an investment in BSUB, including interest rate risk, credit risk, subordinated ranking risk, subordinated bond risk and concentration risk. Investment value can go up and down. An investment in the Fund should only be considered as part of a broader portfolio, taking into account your particular circumstances, including your tolerance for risk. For more information on risk and other features of the Fund, please see the Product Disclosure Statement and Target Market Determination available on this website.

How to use in a portfolio

  • As part of a core fixed income allocation.
  • As a complement to or substitute for existing fixed rate bond investments.

How to Invest

  • You can buy or sell units just like any share on the ASX.
  • Fund requires no minimum investment.

Key facts

Pricing information

Current price
Last trade*
% Change (prev day)
Bid (delayed)
Offer (delayed)

* Data is delayed by at least 20 minutes.

NAV
NAV/Unit* $25.17

* As at 28 May 2024

Profile

Net assets* ($A) $7,048,432
Units outstanding* (#) 280,000
Management fee and cost** (p.a.) 0.29%
Distribution frequency Monthly
Distribution reinvestment plan (DRP) Full or partial participation available

* As at 28 May 2024

* As of close of previous day
**Certain additional costs apply. Please refer to PDS.

Trading information

ASX code BSUB
Bloomberg code BSUB AU
IRESS code BSUB.AXW
Market makers Susquehanna Pacific

Index information

Index Solactive Australian Major Bank Subordinated FRN Index
Index provider Solactive AG
Index ticker N/A
Bloomberg index ticker SOLAMBBI Index

Portfolio characteristics

Running yield (% p.a.) 6.15
All-in yield (% p.a.) 5.70
Estimated yield to worst (% p.a.) 5.57
Discount margin (bps) 136.66
Average time to call (yrs) 3.10
Modified duration (yrs) 0.17
Spread duration (yrs) 2.73
Average credit rating A-
As at 29 May 2024

Holdings & allocation

Portfolio holdings

Name Weight (%)
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD 6.3055% JAN-34 10.3%
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD 6.1856% FEB-31 9.2%
NATIONAL AUSTRALIA BANK LTD 6.04% NOV-30 9.2%
COMMONWEALTH BANK OF AUSTRALIA 5.6529% AUG-31 8.5%
NATIONAL AUSTRALIA BANK LTD 6.2936% FEB-34 8.5%
NATIONAL AUSTRALIA BANK LTD 6.36% NOV-31 7.7%
WESTPAC BANKING CORP 6.6537% JUN-33 7.4%
COMMONWEALTH BANK OF AUSTRALIA 6.2554% APR-32 7.2%
WESTPAC BANKING CORP 5.9064% JAN-31 7.2%
COMMONWEALTH BANK OF AUSTRALIA 6.4202% OCT-33 6.4%

* As at 27 May 2024. Excludes cash

Sector allocation

Australian Subordinated Bank FRNs
100.0%

* As of 30 April 2024

Performance

Fund returns after fees (%)

  Fund Index
1 month - 0.76%
3 months - 1.93%
6 months - 3.82%
1 year - 7.56%
3 year p.a. - 3.83%
5 year p.a. - 3.64%
10 year p.a. - -
Since inception (p.a.) - 3.75%
Inception date - 28-Feb-19

* As at 30 April 2024.
Past performance is not an indicator of future performance. Returns are calculated in Australian dollars using net asset value per unit at the start and end of the specified period and do not reflect brokerage or the bid ask spread that investors incur when buying and selling units on the ASX. Returns are after fund management costs, assume reinvestment of any distributions and do not take into account tax paid as an investor in the Fund. Returns for periods longer than one year are annualised. Current performance may be higher or lower than the performance shown.

Chart

Past performance is not indicative of future performance. Please refer to "Fund returns after fees" for additional information regarding performance/return information.

Distributions

Yield information

12 mth distribution yield* -

You can elect DRP by logging into Link’s Investor Centre. Once you are logged in, please proceed to the 'Payments and Tax' tab and select ‘Reinvestment Plans'.

Recent distributions

Ex Date Record Date Payment Date Distribution Unit ($) Annual Distribution Return (%) (1)
- - - - -

Announcements

ASX announcements: BSUB

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