BetaShares has announced the launch of the Australian Government Bond Exchange Traded Fund (ETF) (AGVT) which will offer exposure to income-producing bonds issued by Australian federal and state governments, with a component issued by supernationals, sovereign agencies and similar organisations.
The firm said that AGVT currently provided an income return that was higher than traditional Australian government bond benchmarks and outperformed indices on a total return basis by over 1.5 per cent per annum over the last 10 years.
BetaShares chief executive, Alex Vynokur, said: “This is our first product that offers specific exposure to government bonds, a category that enjoys the highest level of investor security within the Australian bond market.
“Government bonds are a core part of a balanced portfolio given their historical negative correlation to equities and high level of stability relative to corporate bonds.
“Australian government bonds are considered to be an important ‘safe-haven’ asset class for investors and their advisers, and we are excited to deliver another compelling, cost effective fixed income investment solution to the market.”
Additionally, according to the monthly BetaShares Australian ETF Review, fixed income ETFs registered net flows of $1.16 billion in the first five months of the year, which put the flows in this category on par with the ever-popular international equities category, the company said.