Howdy. I was reading this week about the suggestion of including exchange-traded bonds as a way of diversifying a portfolio. My understanding is that there are few providers of these at the moment – the only one I’m aware of is ACBC (Australian Corporate Bond Company). Do you have any views on these and their advantages and disadvantages?
A: Thanks for the question
I am not aware of any other providers.
You could also look at FIIG (www.fiig.com.au) who sell interests in bonds directly, or some of the managed bond funds.
Apart from the underlying bond itself, exchange-traded bonds are just offering a potential liquidity advantage. You need to decide whether the spread you are paying (ie the offer yield compared to the true market yield) is worth the potential liquidity.
