Disclaimer: Please note that the information on this website does not constitute investment advice. You should obtain independent financial advice before buying Exchange-traded Treasury Bonds.
Exchange-traded Treasury Bonds (eTBs) offer a convenient and readily accessible way for you to invest in Treasury Bonds via the Australian Securities Exchange (ASX). Holders of eTBs gain beneficial ownership of Treasury Bonds in the form of CHESS Depositary Interests (CDIs). This means holders obtain all the economic benefits, including coupon and principal payments, attached to legal ownership of the Treasury Bonds over which the CDIs have been issued.
eTBs can be bought and sold on the ASX in the same way as listed shares. Trades are cleared by ASX Clear and settled through CHESS.
You should contact your financial adviser or broker to buy or sell eTBs. Brokerage charges may be incurred. For more information, please see the Exchange-traded Australian Government Bonds section of the ASX website.
The minimum investment holding of any eTB is one unit which is equivalent to $100 Face Value of the Treasury Bond over which the eTB has been issued.
When you purchase an eTB you have the option to hold it until it matures or sell it prior to maturity. Below are examples which demonstrate different scenarios. The rates and figures used below are for illustrative purposes only.
Brad bought twenty 4.25% 21 July 2017 eTBs on 24 January 2013. Each eTB cost $106, so he paid $2,120 for $2,000 Face Value (20 eTBs x 100 face value per eTB). The Coupon Interest Rate on that eTB is 4.25%, so Brad receives $42.50 of coupon interest (4.25 ÷ 2 = $2.125 coupon for each eTB) on 21 July 2013 and every six months on 21 January and 21 July each year until maturity on 21 July 2017. On the Maturity Date he receives the final Coupon Interest Payment ($42.50) and also $2,000 Face Value.
Gerald bought fifty 2.75% 21 April 2024 eTBs. Each eTB cost $94, so he paid $4,700. One week later, he decided to sell all of his eTBs. The price of the eTBs may be higher or lower than $94 at that time, so he may either make a gain or a loss.