Betashares expands defined income ETF range

Betashares has launched its fourth defined income active ETF, now available on ASX's AQUA market.

The 2031 Fixed Term Corporate Bond Active ETF (ASX: 31BB) will provide investors with exposure to a diversified portfolio of high yielding, fixed-rate, Australian dollar denominated investment grade corporate bonds, maturing in the 12 months leading up to May 2031.

Additionally, only securities with a principal amount outstanding of $250 million or greater will be considered, Betashares said.

The ETF is designed to deliver stable monthly income and a return of capital at maturity, and builds on existing products maturing in 2028, 2029 and 2030 and extends the options for investors to align their income investments with specific time horizons and cash flow needs, it said.

Like other ETFs in the defined income range, 31BB provides regular monthly income with the flexibility of an ETF structure.

Notably, in the 12 months leading up to the maturity date, the ETF's portfolio will begin to increase cash and securities holdings.

Betashares said fixed maturity bond ETFs are widely adopted in markets such as the US, and fills a gap between traditional bond ETFs, which do not replicate the certainty of holding an individual bond to maturity.

Betashares chief executive Alex Vynokur said the new ETF presents an opportunity to capture attractive monthly income until its maturity date amid expectations of a higher interest rate environment.

"The addition of 31BB to our Australian-first defined income ETF range will help investors meet their goals with a broader range of investment solutions," Vynokur said.

"With the extension of our defined oncome range, we are continuing to provide investors with a simple way to access a diversified portfolio of corporate bonds, offering predictable income together with the liquidity, transparency and diversification benefits of an ETF."

The defined income product suite now consists of four ETFs, including the 2028 Fixed Term Corporate Bond Active ETF (ASX: 28BB); 2029 Fixed Term Corporate Bond Active ETF (ASX: 29BB); 2030 Fixed Term Corporate Bond Active ETF (ASX: 30BB); and 31BB.