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Australian Government Bonds

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Buying and selling eTIBs

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 Indexed Bonds.

Exchange-traded Treasury Indexed Bonds (eTIBs) offer a convenient and readily accessible way for you to invest in Treasury Indexed Bonds via the Australian Securities Exchange (ASX). Holders of eTIBs gain beneficial ownership of Treasury Indexed 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 Indexed Bonds over which the CDIs have been issued.

How can I buy and sell eTIBs?

eTIBs 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 eTIBs. Brokerage charges may be incurred. For more information, please see the Exchange-traded Australian Government Bonds section of the ASX website.

What is the minimum amount I can invest?

The minimum investment holding of any eTIB is one unit which is equivalent to $100 Face Value of the Treasury Indexed Bond over which the eTIB has been issued.

Practical examples

When you purchase an eTIB 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 are for illustrative purposes only.

Example 1: Holding an eTIB until maturity

Treena bought ten 3% 20 September 2025 eTIBs on 26 October 2017. Each eTIB cost $138, so she paid $1,380.

The Nominal Value of an eTIB is the adjusted capital value of the security – the value as adjusted for movement in the Consumer Price Index (CPI) over the life of the bond. It began at 100 and increased with inflation to 119.67 for the 20 December 2017 coupon. eTIBs pay coupon interest every three months at a fixed percentage of the notional value, so Treena received a $8.98 coupon payment on that day (3.00 ÷ 4 x (119.67/100) = 89.75250 cents coupon for each eTIB).

The next coupon would be paid on 20 March 2018. The Nominal Value increased with inflation to 120.61, so Treena would receive $9.05 on that day (3.00 ÷ 4 x (120.61/100) = 90.45750 cents coupon for each eTIB).

Treena will continue to receive coupons every three months (on 20 March, 20 June, 20 September and 20 December each year) until maturity on 20 September 2025. She will also receive the entire Nominal Value of the bond on that date.

Example 2: Selling an eTIB prior to maturity

Ian bought fifty 1.25% 21 February 2022 eTIBs.  Each eTIB cost $105, so he paid $5,250.  One week later, he decided to sell all of his eTIBs.  The price of the eTIBs may be higher or lower than $105 at that time, so he may either make a gain or a loss.