Vanguard Australian Fixed Interest Index ETF

Risk Classification: 3 – Balanced

Price per Unit (29 Mar 16): 49.80 [AUD]

Dividend Yield: 3.89%

Expense Ratio: 0.20%

Please refer prospectus for detailed risk disclosure

Investment Rationale:

This ETF broadly tracks the Australian medium and long term government and agency bond market. Since it invests in longer term instruments it’s performance may be more volatile than funds that invest in only shorter term instruments. We don’t expect a sharp sell-off in Australian govies due to our overall bearish outlook for riskier assets and balanced outlook by RBA on interest rates.

Below Chart Shows the generic Australian 5y Government bond yield:

aus 5y treasury

Fundamental Risk to investment:

This ETF will sharply sell off in the event of a sharp sell-off in Australian Government bonds. This is not the base case expectations.

Details of ETF:

Details on Vanguard website – For Live data and Prospectus