Interest Rate Hedged Australian Investment Grade Corporate Bond ETF
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
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.
Invest in HCRD with Betashares Direct
Key facts
Profile
| Units outstanding* (#) | 1,102,122 |
|---|---|
| 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 5 December 2024
**Certain additional costs apply. Please refer to PDS.
Pricing information
| Current price | |
|---|---|
| Last trade* | |
| % Change (prev day) | |
| Bid (delayed) | |
| Offer (delayed) | |
| NAV | * As at 5 December 2024 |
| NAV/Unit* | $24.78 |
| * Data is delayed by at least 20 minutes. | |
Past performance is not indicative of future performance. Please refer to "Fund returns after fees" for additional information regarding performance/return information.
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 |
Performance
Fund returns after fees (%)
| Fund | Index | |
|---|---|---|
| 1 month | 0.45% | 0.42% |
| 3 months | 2.43% | 2.36% |
| 6 months | 4.06% | 4.04% |
| 1 year | 9.71% | 9.45% |
| 3 year p.a. | - | 5.29% |
| 5 year p.a. | - | 4.21% |
| 10 year p.a. | - | 4.08% |
| Since inception (p.a.) | 9.75% | 9.64% |
| Inception date | 14-Nov-22 | - |
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.
Portfolio characteristics
| Running yield (% p.a.) | 4.74 |
|---|---|
| Estimated yield to maturity (% p.a.) | 5.48 |
| Estimated yield to worst (% p.a.) | 5.48 |
| Average maturity (yrs) | 6.96 |
| Modified duration (yrs) | -0.07 |
| Spread duration (yrs) | 5.56 |
| Credit spread (bps) | 139.21 |
| Average credit rating | BBB+ |
* As at 06 December 2024
Holdings and allocation
Portfolio holdings
| Name | Weight (%) |
|---|---|
| AUD - AUSTRALIA DOLLAR | 2.6 |
| SCENTRE GROUP TRST 1 5.9% NOV-34 | 2.1 |
| ENBW INTL FINANCE BV 6.048% OCT-34 | 2.1 |
| AURIZON NETWORK PTY LTD 6.2% DEC-33 | 2.1 |
| WOOLWORTHS GROUP LTD 2.75% NOV-31 | 2.1 |
| AUSTRALIA PACIFIC AIRPOR 5.598% NOV-32 | 2.1 |
| REGISTRY FINANCE PTY LTD 5.739% JUN-34 | 2.1 |
| GPT WHL OFFICE FD NO1 3.222% NOV-31 | 2.1 |
| MIRVAC GROUP FINANCE LTD 5.15% MAR-31 | 2.1 |
| ORIGIN ENERGY FINANCE 5.35% SEP-31 | 2.1 |
Sector allocation
| Real Estate | 31.9% |
|---|---|
| Industrials | 27.8% |
| Utilities | 14.1% |
| Communications | 8.0% |
| Consumer Staples | 6.0% |
| Consumer Discretionary | 4.0% |
| Banks | 6.1% |
| Non-bank lenders | 2.0% |
* As of 31 October 2024
Distributions
Frequency and yield
| Distribution frequency | Monthly |
|---|---|
| 12 mth distribution yield* | 4.7% |
*As at 31 October 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.
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) |
|---|---|---|---|---|
| 2-Dec-24 | 3-Dec-24 | 17-Dec-24 | $0.091914 | - |
| 1-Nov-24 | 4-Nov-24 | 18-Nov-24 | $0.097856 | - |
| 1-Oct-24 | 2-Oct-24 | 16-Oct-24 | $0.101868 | - |
| 2-Sep-24 | 3-Sep-24 | 17-Sep-24 | $0.098466 | - |
| 1-Aug-24 | 2-Aug-24 | 16-Aug-24 | $0.108183 | - |
| 1-Jul-24 | 2-Jul-24 | 16-Jul-24 | $0.091343 | - |
| 3-Jun-24 | 4-Jun-24 | 19-Jun-24 | $0.101407 | - |
| 1-May-24 | 2-May-24 | 16-May-24 | $0.107367 | - |
| 2-Apr-24 | 3-Apr-24 | 17-Apr-24 | $0.090617 | - |
| 1-Mar-24 | 4-Mar-24 | 18-Mar-24 | $0.090038 | - |
| 1-Feb-24 | 2-Feb-24 | 16-Feb-24 | $0.102201 | - |
| 2-Jan-24 | 3-Jan-24 | 17-Jan-24 | $0.089212 | - |
| 1-Dec-23 | 4-Dec-23 | 18-Dec-23 | $0.091591 | - |
| 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.