Is BOND a good ETF?
BOND is the State Street SPDR S&P/ASX Australian Bond ETF from State Street. We classify it under Bonds and AU. With about $51 million in assets it is a relatively small fund (worth checking spreads and liquidity before buying).
On a total-return basis, BOND has delivered 1.41% a year over 10 years (ranked 101st of 108 ETFs we track), -0.41% a year over 5 years (ranked 167th of 188 ETFs we track), 3.7% a year over 3 years (ranked 195th of 226 ETFs we track), and 1.46% a year over 1 year (ranked 235th of 308 ETFs we track). It has trailed most comparable ETFs over the periods we measure, so look closely at whether its strategy fits what you're after.
The management fee of 0.1% is very low — typical of low-cost index funds. That's cheaper than the typical 0.32% for similar ETFs. It pays a healthy 4.08% yield, attractive if you want regular income. Bear in mind distributions are taxed each year at your marginal rate, so a high yield is less tax-efficient for higher earners and during the accumulation phase.
Over the past 10 years its volatility has been low (annualised standard deviation around 4.87%), meaning a relatively smooth ride.
Portfolio turnover is moderate at about 30% a year — a fair chunk of the portfolio is bought and sold each year, so expect a little more in the way of realised capital gains and trading costs than a plain index fund.
Strengths
- Low-cost: a 0.1% management fee keeps more of the return in your pocket.
- Pays a useful 4.08% income yield.
- Low volatility (4.87% over 10 years) for a smoother ride.
Things to watch
- Has lagged most peers over 10 years (101st of 108).
Good to know
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What BOND's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.