A bond is a type of debt security. Exchange-traded Australian Government Bonds (“AGBs”) offer a convenient and accessible way to invest in Australian Government Bonds through the ASX1.
A one unit holding of an AGB provides beneficial ownership of $100 Face Value of the Treasury Bond over which it has been issued.
- Diversification into an additional asset class
- Secure regular income – semi-annual coupon interest paid by the Australian Government
- Fixed interest for the life of the investment
- Liquidity – AGBs can be sold any time the ASX market is open
- Brokerage from $19.95* per trade
Easy to trade, in the same way you would buy shares, either online or over the phone. Refer to the ‘Risks’ tab for some risks associated with investing exchange-traded AGBs .
Types of Exchange-traded AGBs
- Treasury Bonds – medium to long-term debt securities that carry an annual rate of interest fixed over the life of the security, payable six monthly. The bonds are repayable at face value on maturity.
- Treasury Indexed Bonds – medium to long-term debt securities where the capital value of the security is adjusted for movements in the Consumer Price Index (“CPI”). Interest is paid quarterly, at a fixed rate, on the adjusted capital value. At maturity, you receive the capital value of the bond adjusted for movement in the CPI over the life of the bond.
Lists of available Treasury Bonds and Treasury Indexed Bonds can be found on the ASX website.
1 Investors in AGBs have beneficial ownership of AGBs in the form of a CHESS Depositary Interest (CDI). This means they obtain all the economic benefits, including payments, attached to legal ownership of the AGB.
* Please refer to the FSG for full brokerage rates.