Interest Rate Hedged Australian Investment Grade Corporate Bond ETF
- Cash & Fixed income
Attractive income from high-quality Australian corporate bonds, with reduced interest rate risk
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
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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.
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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.
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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* | $24.91 |
* As at 20 November 2024
Profile
| Net assets* ($A) | $27,455,962 |
|---|---|
| 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 20 November 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.) | 4.49 |
|---|---|
| Estimated yield to maturity (% p.a.) | 5.57 |
| Estimated yield to worst (% p.a.) | 5.57 |
| Average maturity (yrs) | 6.40 |
| Modified duration (yrs) | 0.00 |
| Spread duration (yrs) | 5.11 |
| Credit spread (bps) | 123.14 |
| Average credit rating | BBB+ |
Holdings & allocation
Portfolio holdings
| Name | Weight (%) |
|---|---|
| WESTCONNEX FINANCE CO PT 6.15% OCT-30 | 2.5% |
| AUSGRID FINANCE PTY LTD 5.408% MAR-31 | 2.2% |
| WOOLWORTHS GROUP LTD 2.75% NOV-31 | 2.2% |
| MIRVAC GROUP FINANCE LTD 5.15% MAR-31 | 2.2% |
| REGISTRY FINANCE PTY LTD 5.739% JUN-34 | 2.2% |
| ORIGIN ENERGY FINANCE 5.35% SEP-31 | 2.1% |
| GPT WHL OFFICE FD NO1 3.222% NOV-31 | 2.1% |
| AURIZON NETWORK PTY LTD 6.1% SEP-31 | 2.1% |
| CONNECTEAST FINANCE PTY 5.6% JUN-31 | 2.1% |
| AUSNET SERVICES HOLDINGS 6.134% MAY-33 | 2.1% |
* As at 20 November 2024. Excludes cash
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
Performance
Fund returns after fees (%)
| Fund | Index | |
|---|---|---|
| 1 month | 1.24% | 1.20% |
| 3 months | 2.38% | 2.35% |
| 6 months | 4.67% | 4.64% |
| 1 year | 9.85% | 9.54% |
| 3 year p.a. | - | 4.82% |
| 5 year p.a. | - | 4.22% |
| 10 year p.a. | - | 4.02% |
| Since inception (p.a.) | 9.92% | 9.81% |
| Inception date | 14-Nov-22 | - |
* As at 31 October 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* | 4.7% |
*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'.