The Fund aims to provide investment returns before fees and other costs which track the performance of the Reference Index.

The Fund gives investors access to the investment returns of a portfolio of Australian dollar denominated Investment Grade floating rate Subordinated Bonds. 

The Fund provides investors with:

• cost effective and easy access to a portfolio of Australian issued Subordinated Bonds via a single trade on ASX;
• transparency of holdings, pricing and performance; and
• flexibility of intraday ASX trading capability.

Compared to unlisted actively managed funds, investors benefit from: trading via live prices on ASX; potentially lower costs; liquidity; transparency and intraday trading.

SUBD is likely to be appropriate for consumers who are higher risk in nature, can accept higher potential losses in order to target a higher return or have a more aggressive or very high risk appetite, can accept higher potential losses and seek to maximise returns.

The Fund employs a passive management strategy of investing directly in a portfolio primarily consisting of securities from the Reference Index with the intention of replicating the risk profile and performance of the Reference Index.

The Fund aims to hold an appropriate number of Subordinated Bonds so as to produce a portfolio with a risk profile and performance consistent with that of the Reference Index.
This is generally achieved by holding a representative sample of the Bonds in the Reference Index. Weightings in the Fund may vary from the Reference Index weightings. The Fund may also invest in other securities determined by us as necessary to achieve the Fund’s investment objective and as permitted under the AQUA Rules. Every time a security is either added to or removed from the Fund’s Reference Index, the composition
and risk exposure profile of the Reference Index changes and may require us to rebalance the Fund’s portfolio.

The iBoxx AUD Investment Grade Subordinated Debt Index is designed to reflect the performance of Investment Grade Subordinated Bonds denominated in AUD.

The Reference Index only includes AUD denominated floating rate bonds issued by Financial Institutions that qualify as Tier 2 Capital under the APRA Rules and hold an iBoxx Credit Rating of Investment Grade.