Interest Rate Hedged Australian Investment Grade Corporate Bond ETF

HCRD

Attractive income from high-quality Australian corporate bonds, with reduced interest rate risk

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Overview

Fund objective

HCRD aims to track the performance of an index (before fees and expenses) that provides intelligent exposure to a portfolio of senior, fixed-rate, investment grade Australian corporate bonds, hedged to reduce interest rate risk.

Fund strategy

HCRD obtains its exposure to investment grade Australian corporate bonds by investing in the Betashares Australian Investment Grade Corporate Bond ETF (ASX: CRED). CRED’s portfolio includes up to 50 bonds, with eligible bonds requiring amounts outstanding of at least $250 million and a term to maturity of between 5.25 and 10.25 years. Alongside its exposure to bonds, HCRD sells bond futures contracts to substantially reduce interest rate risk, mitigating the potential negative impact of rising interest rates on the performance of the corporate bond portfolio.

Benefits of HCRD

  • Attractive income, paid monthly

    HCRD seeks to provide investors with attractive monthly income that is expected to exceed income paid on cash, term deposits, and senior floating rate notes.

  • Hedged against interest rate risk

    HCRD uses bond futures contracts to substantially reduce interest rate risk. This hedging strategy aims to reduce volatility and capital variability of the bond portfolio.

  • Invest in bonds intelligently

    Bonds in HCRD’s underlying portfolio are selected based on expected returns rather than debt outstanding, seeking to avoid shortcomings of traditional debt-weighted indices and provide relatively higher returns.

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

 

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* $24.10

* As at 1 March 2024

Profile

Net assets* ($A) $15,443,306
Units outstanding* (#) 640,837
Management fee and cost** (p.a.) 0.29%
Distribution frequency Monthly
Distribution reinvestment plan (DRP) Full or partial participation available
Registry Link Market Services

* As at 1 March 2024

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

Trading information

Bloomberg code HCRD AU
IRESS code HCRD.AXW
Market makers Susquehanna Pacific

Index information

Index Solactive Australian Investment Grade Corporate Bond Select DH Index
Index provider Solactive AG
Index ticker N/A
Bloomberg index ticker SOLASIGH Index

Portfolio characteristics

Running yield (% p.a.) 4.31
Estimated yield to maturity (% p.a.) 5.66
Estimated yield to worst (% p.a.) 5.66
Average maturity (yrs) 6.76
Modified duration (yrs) 0.00
Spread duration (yrs) 5.54
Credit spread (bps) 166.65
Average credit rating A-
As at 04 March 2024

Holdings & allocation

Portfolio holdings

Name Weight (%)
DEUTSCHE BAHN FIN GMBH 6.016% NOV-33 4.2%
AUCKLAND INTL AIRPORT 6.482% NOV-33 2.3%
AUSTRALIA PACIFIC AIRPOR 3.763% NOV-31 2.2%
WESTCONNEX FINANCE CO PT 3.15% MAR-31 2.2%
AUSNET SERVICES HOLDINGS 6.134% MAY-33 2.2%
CONTACT ENERGY LTD 6.398% NOV-30 2.2%
NSW ELECTRICITY NETWORKS 2.543% SEP-30 2.2%
WOOLWORTHS GROUP LTD 2.75% NOV-31 2.2%
SCENTRE GROUP TRUST 1/2 6.5% MAY-31 2.2%
VERIZON COMMUNICATIONS 2.65% MAY-30 2.1%

* As at 1 March 2024. Excludes cash

Sector allocation

Financial
37.7%
Communications
10.4%
Consumer, Non-cyclical
14.6%
Utilities
14.3%
Industrial
14.6%
Consumer, Cyclical
8.3%
Technology
0.0%
Basic Materials
0.0%

* As of 31 January 2024

Performance

Fund returns after fees (%)

  Fund Index
1 month 0.85% 0.81%
3 months 2.81% 2.67%
6 months 5.41% 5.26%
1 year 8.75% 8.64%
3 year p.a. - 2.60%
5 year p.a. - 3.67%
10 year p.a. - 3.81%
Since inception 10.35% 10.31%
Inception date 14-Nov-22 -

* As at 31 January 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

Distribution frequency Monthly
12 mth distribution yield* 4.5%

*As at 31 January 2024. Yield is calculated by summing the prior 12-month per unit distributions divided by the closing NAV per unit at the end of the relevant period. Yield will vary and may be lower at time of investment. Past performance is not indicative of future performance.

Recent distributions

Ex Date Record Date Payment Date Distribution Unit ($) Annual Distribution Return (%) (1)
1-Mar-24 4-Mar-24 18-Mar-24 $0.090038 -
1-Feb-24 2-Feb-24 16-Feb-24 $0.102201 4.98%
2-Jan-24 3-Jan-24 17-Jan-24 $0.089212 4.94%
1-Dec-23 4-Dec-23 18-Dec-23 $0.091591 5.05%
1-Nov-23 2-Nov-23 16-Nov-23 $0.097589 -
2-Oct-23 3-Oct-23 17-Oct-23 $0.086365 -
1-Sep-23 4-Sep-23 18-Sep-23 $0.097357 -
1-Aug-23 2-Aug-23 16-Aug-23 $0.092965 -
3-Jul-23 4-Jul-23 18-Jul-23 $0.089392 -
1-Jun-23 2-Jun-23 19-Jun-23 $0.098433 -
1-May-23 2-May-23 16-May-23 $0.083069 -
3-Apr-23 4-Apr-23 20-Apr-23 $0.091831 -
1-Mar-23 2-Mar-23 16-Mar-23 $0.080539 -
1-Feb-23 2-Feb-23 16-Feb-23 $0.079551 -
3-Jan-23 4-Jan-23 18-Jan-23 $0.110937 -

1 This is the annual distribution return to the end of the relevant distribution date. The distribution return reflects the contribution to total investment return made by the Fund's distributions. Distribution return is calculated as the total return less the growth return. Total return is calculated as the percentage change in a continuing investor's interest in the Fund assuming reinvestment of all distributions back into the Fund (and no other application or withdrawal), net of ongoing fees. Growth return is the Fund's return excluding distributions, net of ongoing fees. Past performance is not indicative of future performance.

Announcements

ASX announcements: HCRD

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