The Best ETFs Australian Fixed Interest sector includes ETFs, managed funds and index funds which cover Australian bonds ranging from Government treasuries to Corporate and Hybrids; right through to Cash Management Trusts (CMTs).
This sector may also include cash or bond products from foreign Governments or companies issuing their debt (bonds) or cash products here in Australia.
Performance Characteristics
Over the ultra-long-term, we expect the Australian bonds and cash sector to perform with low amounts of volatility (ups and downs) but equally low capital gains. Moreover, we believe investors should expect the income return produced by high-grade bonds and cash to remain low for the foreseeable future as inflation and Australian interest rates remain well below historical levels.
Don’t Forget…
One of the unique features of the Australian term deposit market — it’s a legacy of our time during the Global Financial Crisis (GFC) of 2008/2009 — is the Australian Government Guarantee on deposits.
Before buying a cash ETF, we think you should learn more about this relatively unique protection mechanism for Australians who deposit up to $250,000 in an approved bank. It may offer more security than buying a cash ETF. You can learn more about the Australian Government’s deposit guarantee by clicking here.
We think you should consult a licensed, independent and trustworthy financial adviser if you need help understanding the guarantee.
