Vanguard Investments Australia has launched an Australian Government Bond Index Fund, which it says offers investors a simple, low-cost and diversified quarterly income stream invested
Vanguard Investments Australia has launched an Australian Government Bond Index Fund, which it says offers investors a simple, low-cost and diversified quarterly income stream invested in a government-backed asset base.
The Vanguard Australian Government Bond Index Fund invests in government and semi-government bonds, and seeks to match the total return of the UBS Australian Government Bond Index, before fees and expenses.
The UBS Australian Government Bond Index is a value weighted index of approximately 50 securities (bonds) issued by the Commonwealth Government of Australia and Australian State Government guaranteed authorities and treasury corporations.
The fund’s management fees are 0.29 per cent per annum with no entry, exit or switching fees. Unit prices are calculated daily with income paid quarterly.
The fund is open to minimum applications of AUD500,000.
Roger McIntosh, principal and head of fixed interest, Vanguard Investments Australia, says a key feature of the fund is its zero exposure to non-government bonds.
“This fund offers an option for investors looking for a very high level of security in the fixed interest component of their portfolio and enables investors the ability to plan with certainty their allocation to government and non-government bonds,” he adds.
‘The Vanguard Australian Government Bond Index Fund together with the Vanguard International Fixed Interest Index Fund (Hedged) will allow investors access to a highly diversified, global portfolio of fixed interest securities that are backed by government, semi-government and government guaranteed entities.”