Australian Major Bank Subordinated Debt ETF
- Cash & Fixed income
Earn attractive monthly income from high quality subordinated bonds issued by the ‘big 4’ Australian banks.
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* | $25.08 |
* As at 16 May 2024
Profile
| Net assets* ($A) | $6,019,193 |
|---|---|
| Units outstanding* (#) | 240,000 |
| Management fee and cost** (p.a.) | 0.29% |
| Distribution frequency | Monthly |
| Distribution reinvestment plan (DRP) | Full or partial participation available |
* As at 16 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.) | 5.78 |
| Estimated yield to worst (% p.a.) | 5.52 |
| Discount margin (bps) | 143.40 |
| Average maturity (yrs) | 7.95 |
| Modified duration (yrs) | 0.18 |
| Spread duration (yrs) | 2.84 |
| Average credit rating | 17 May 2024 |
Holdings & allocation
Portfolio holdings
| Name | Weight (%) |
|---|---|
| COMMONWEALTH BANK OF AUSTRALIA 5.6529% AUG-31 | 10.0% |
| AUSTRALIA & NEW ZEALAND BANKING GROUP LTD 6.3055% JAN-34 | 9.5% |
| AUSTRALIA & NEW ZEALAND BANKING GROUP LTD 6.1856% FEB-31 | 9.1% |
| NATIONAL AUSTRALIA BANK LTD 6.04% NOV-30 | 9.0% |
| NATIONAL AUSTRALIA BANK LTD 6.36% NOV-31 | 8.9% |
| COMMONWEALTH BANK OF AUSTRALIA 6.4202% OCT-33 | 7.5% |
| NATIONAL AUSTRALIA BANK LTD 6.2936% FEB-34 | 7.4% |
| COMMONWEALTH BANK OF AUSTRALIA 7.0436% NOV-32 | 6.9% |
| WESTPAC BANKING CORP 6.6537% JUN-33 | 6.9% |
| WESTPAC BANKING CORP 5.9064% JAN-31 | 6.7% |
* As at 17 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) |
|---|---|---|---|---|
| - | - | - | - | - |