Betashares Geared Short Australian Government Bond Complex ETF

The Betashares Geared Short Australian Government Bond Complex ETF (BBAB) is designed to provide investors with a way to profit from declines in the value of Australian government bonds. This ETF uses a strategy that involves borrowing money to increase its exposure, aiming to deliver returns that are inversely related to the performance of these bonds. Essentially, if the value of Australian government bonds falls, the ETF is expected to rise in value, offering a potential hedge against interest rate increases. With a management fee of 0.99%, this ETF is suitable for investors looking to take a more aggressive stance on bond market movements.

BBAB focuses specifically on Australian Government Bonds, primarily targeting 10-year maturities. It utilises a derivatives-based structure to achieve its geared short exposure, meaning that it does not directly hold the underlying bonds but instead uses financial contracts to amplify the inverse performance of these bonds. This creates a leveraged position that can react to fluctuations in bond prices, allowing investors to potentially benefit from declines in bond values. The credit quality of these bonds is typically high, as they are issued by the Australian Government, which is considered a low-risk borrower.