Solactive AG has launched Solactive Australian Investment Grade Corporate Bond Select TR index used as the basis for BetaShares Australian Investment Grade Corporate Bond ETF (CRED). The index seeks to replicate the performance of a portfolio of investment grade, senior corporate bonds denominated in Australian dollars (AUD).
The index methodology will favor securities offering superior expected excess returns over Australian government bonds. By selecting bonds based upon expected returns rather than debt outstanding, the index methodology seeks to avoid shortcomings of traditional debt-weighted indices and provide relatively higher returns.
Timo Pfeiffer, head of Research at Solactive, commented: “The index is an addition to our range of smart beta indices in the fixed-income space. We are very happy to partner up with BetaShares and increase the portfolio of investment strategies targeting Australian investors.”
The Solactive Australian Investment Grade Corporate Bond Select TR index is the latest fixed-income index developed together with BetaShares, following the Solactive Australian Bank Senior Floating Rate Bond index and the Solactive Australian Hybrid Securities index. These launches are a further confirmation of Solactive’s growing footprint in the Asia-Pacific region.
The Solactive Australian Investment Grade Corporate Bond Select TR index is calculated as a total return index. Each security is assigned an equal weight, with a maximum weight per issuer of 7%.