Fund manager, Betashares, has announced its Australian Bank Senior Floating Rate Bond ETF (ASX: QPON) has recently passed $1 billion in assets under management.
QPON holds a portfolio of some of the largest and most liquid senior floating rate bonds issued by Australian banks, including an 80% allocation to the big four banks and 20% to other Australian banks. The Fund aims to provide investors with an attractive monthly income, as well as relative capital stability.
Over the past 12 months to 30 June 2023, QPON has received $525 million of net inflows, including $347 million since the start of 2023, as investors have taken advantage of the relatively high level of capital stability of floating rate bonds in the current interest rate environment.
As an asset class, fixed income has resonated strongly with investors and their advisers. Fixed Income ETFs as a category have received the highest net flows from investors this year, with over $2.5 billion. Betashares is the largest provider of cash and fixed income ETFs in Australia, currently holding a 38% market share in the rapidly growing ETF category1.
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Betashares CEO, Mr Alex Vynokur, said fixed income has resonated strongly with investors amid the fastest interest rate hiking cycle in a generation.
“Our leading range of fixed income ETFs have enabled investors to build more robust portfolios by providing access to parts of the fixed income market that have traditionally been the domain of institutional investors. As a result, our floating rate bond funds have assisted investors and their financial advisers to mitigate the impact of global moves to address rising inflation by increasing policy rates.
“In particular, our QPON ETF has helped investors reduce their reliance on fixed rate bonds within their portfolio. Over the past 18 months, investors in our QPON fund not only avoided the worst of the fixed rate bond sell-off but also benefited from increased income paid through monthly distributions. With inflation proving relatively sticky, QPON is expected to continue to resonate with investors, as the income associated with its variable coupon typically moves in line with changes in the RBA cash rate,” Mr Vynokur concluded.
1. Source: Betashares, ASX, CBOE.
