10 Best Bonds to Invest in 2025 in Australia
2025 has plenty of bond options for income and stability. From floating rate ETFs to Australian government bonds, they give you returns in uncertain times.
Low risk investments like Australian government bonds and NBN Co Bonds are for the conservative investor looking for regular income. They preserve capital and give stable returns over the long term.
For higher returns, corporate bonds and diversified portfolios give growth and balance risk. With different durations and issuers they suit the investor looking for moderate returns and diversification.
Please note that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly on our website, blogs , newsletters.
VanEck Floating Rate ETF (ASX: FLOT) 2025
The VanEck Floating Rate ETF (ASX: FLOT) is still a hot topic in 2025 for investors looking for a diversified, stable and low risk income stream.
Offering exposure to a portfolio of Australian dollar-denominated Floating Rate Notes (FRNs) this ETF is a go to for navigating interest rate environments and getting a balanced portfolio.
FLOT Market Stats as at 23 Jan 2025
As at 23 Jan 2025
Price: $24.96 per unit
1-Year Change: +0.36%
Shares Traded: 9,720 in the last trading session
FLOT is tracking its objective of returning the price and yield performance of the Bloomberg AusBond Credit FRN 0+ Yr Index.
Investors looking for income and less market noise will like these numbers.
FLOT Portfolio and Maturity Structure
FLOT invests in a pool of FRNs issued by Australian and international entities.
Major Australian banks, foreign banks, lending institutions and Australian Real Estate Investment Trusts (A-REITs) are included.
The ETF has diversified holdings across multiple industries and sectors to reduce concentration risk and give stable returns.
FRNs in FLOT have different maturities but the ETF’s dynamic management is designed to track the Bloomberg AusBond Credit FRN 0+ Yr Index.
This allows for continuous portfolio rebalancing to get optimal returns and minimize risk of specific maturities.
Not tied to a fixed maturity FLOT is a flexible and responsive to market changes.
FLOT Annual Returns and Long Term Growth
FLOT investors can expect small but stable returns which is one of the big attractions of this ETF.
As at 10 Jan 2025 the year to date return for FLOT is 0.18%. Not high returns but safe and predictable income is a big plus for conservative investors.
Long term the ETF’s performance shows it’s resilient and generates steady income as per its objective of capital preservation and risk reduction.
If an investor puts $100,000 into FLOT in 2025 and FLOT returns 2.5% per annum (a conservative estimate based on historical performance and market conditions) the total investment would be around $128,000 after 10 years.
This is assuming reinvestment of income and no withdrawals during the period. Shows the power of compounding with small returns.
How FLOT manages interest rate risk in 2025
One of the key features of the VanEck Floating Rate ETF is its near zero duration which reduces interest rate risk.
This is because the FRNs in the portfolio reset their coupon payments to the current market interest rate.
So when interest rates go up the coupon payments on the FRNs adjust accordingly and the investor is protected from the negative impact of rising rates that erode the value of fixed rate bonds.
In a rising rate environment like 2025 FLOT has an advantage.
It allows you to earn higher income without taking on significant interest rate risk. Perfect for those who want to hedge against rate volatility and get steady returns.
Diversification with VanEck FLOT
Diversification is the foundation of a solid investment strategy and FLOT does this well.
The ETF has a broad pool of FRNs from top tier financial institutions and corporates so you get exposure to many credit profiles and industries.
This reduces the risk of any one issuer and maximizes income generation.
FLOT’s benchmark index is the Bloomberg AusBond Credit FRN 0+ Yr Index so the portfolio holdings are diversified and high quality.
By tracking the index FLOT gives investors a ready made diversified bond portfolio and eliminates the need for individual bond selection and its complexity.
FLOT 2025 Awards and Accolades
In 2025 FLOT was awarded Money Magazine’s Best Fixed Income ETF.
This confirms it’s a go to investment for those looking for a low risk income generating asset with minimal market volatility.
It further cements FLOT’s position as a trusted player in the Australian bond market.
Why Choose FLOT in 2025
Investing in FLOT in 2025 has many advantages. Here are some of them:
Reduced Interest Rate Risk: FLOT’s floating rate structure means the coupon payments adjust to the current interest rate so you’re protected from rate hikes.
Diversification: With a pool of multiple issuers, industries and sectors FLOT reduces concentration risk and gives you consistent income.
Liquidity and Accessibility: As an ETF listed on the ASX FLOT has daily liquidity so you can buy and sell units easily.
Professional Management: FLOT is managed by VanEck a global asset manager with a reputation for expertise and innovative investment solutions.
Market Conditions: In a rising rate environment FLOT’s structure is a natural hedge so you can get higher coupon payments without taking on fixed rate risk.
How to use FLOT in your portfolio
FLOT can be used in:
Income Portfolios: For retirees or income focused investors FLOT is a low risk income source.
Diversification Tool: Add FLOT to an equity heavy portfolio to reduce overall risk and increase stability.
Cash Alternatives: With its liquidity and low risk profile FLOT can be used as an alternative to cash investments and get better returns with minimal downside.
FLOT top ETF for 2025
FLOT is the low risk investment for 2025.
Its diversified portfolio, alignment with market conditions and being a top fixed income ETF makes it a good choice for conservative and income focused investors.
It reduces interest rate risk and gives you steady returns so FLOT is the solution to navigate the changing financial landscape.
Whether you want to hedge interest rate volatility, diversify or get consistent income FLOT does it all.
Supported by VanEck and the robust market infrastructure this ETF is proof that innovative solutions work in a changing market.
For 2025 FLOT is a top choice in the Australian bond market for stability, flexibility and performance.
iShares 15+ Year Australian Government Bond ETF (ASX: ALTB)
The iShares 15+ Year Australian Government Bond ETF (ASX: ALTB) is for investors looking for long term, stable and low risk income in 2025. It gives you access to a portfolio of Australian government bonds with maturities over 15 years so you get consistent income and capital preservation.
ALTB 2025 Market Stats
As of 23 Jan 2025 ALTB’s performance is:
Price: $127.85 per unit
1-Year Change: 2.4% up, proving it’s a fixed income investment that can handle volatile and changing market conditions.
Average Daily Volume: 4.5k units traded per day, moderate liquidity and steady investor interest. ALTB tracks the Bloomberg AusBond 10+ Year Treasury Index so you get stable income.
What’s in the ALTB portfolio
ALTB only invests in high credit quality bonds issued by the Australian government and related entities. It focuses on bonds with 15+ year maturities so you get stable yields, minimal corporate credit risk and a solid portfolio.
With a approximate 18 year duration ALTB is for risk averse investors looking for reliable income. It preserves long term capital and gives you returns in different economic conditions.
Managing interest rate risk with ALTB
Rising interest rates can impact fixed income investments but ALTB reduces this through its yield management strategies. You get a high quality portfolio that holds value in tough market conditions.
Why iShares ALTB in 2025
ALTB’s stability, predictable income and top credit quality makes it a good choice for diversified portfolios. It goes for low risk government securities so you get returns for conservative investors looking for financial security.
Safety and capital preservation is ALTB’s priority so it gives you a steady income stream. This is why it’s the preferred choice for those navigating uncertain markets while looking for long term growth.
SPDR S&P/ASX Australian Bond Fund (ASX: BOND)
The SPDR S&P/ASX Australian Bond Fund (ASX: BOND) is for Australian investors looking for steady income and balanced risk in 2025. BOND gives you exposure to a diversified portfolio of high quality Australian bonds, capital preservation and consistent returns.
BOND 2025 Market Stats
As of 23 Jan 2025 BOND’s stats are:
Price: $28.45 per unit
1-Year Change: 2.1% up, proving it’s a fixed income investment that can handle changing interest rates.
Average Daily Volume: 18k units traded per day, strong liquidity and high investor interest.
What’s in the BOND portfolio
BOND has Australian government, semi-government and high credit corporate bonds. Its 6 year weighted average duration gives you diversification, stable yields and reduced interest rate risk.
This fund is for investors looking for reliable returns without significant corporate credit risk. It gives you dependable performance so it’s a practical and stable investment in uncertain markets.
Managing interest rate risk with BOND
BOND uses active duration management and a bond mix to reduce interest rate risk. Its intermediate duration structure gives you income and capital preservation so you get consistent performance in changing financial markets.
Why SPDR BOND in 2025
BOND’s diversification, liquidity and stable income makes it a core fixed income holding. Its low cost structure and alignment to the S&P/ASX Australian Fixed Interest Index makes it a simple and trusted option for conservative investors.
Safety, stability and competitive yield, BOND is a solid base for diversified portfolios. It’s for those looking for predictable income with moderate interest rate risk.
Please note that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly on our website, blogs , newsletters.
Government Bonds
Government Bonds are a core investment for those looking for stability, low risk and steady income in 2025. Backed by the Australian Government so you get security and predictable returns for conservative investors.
Australian Government Bonds 2025 Market Features
As of 23 Jan 2025 Government Bonds are:
Market Yield: 3.1% to 4.5% depending on maturity and bond type.
Interest Payments: Semi-annual.
Credit Rating: AAA so the highest level of safety and credit quality.
What’s in Australian Government Bonds
These bonds are issued by the Australian Government with maturities from short term (less than 5 years) to long term (over 15 years). They include Treasury Bonds (fixed coupon rates) and Treasury Indexed Bonds (inflation linked payments).
With options to suit different time horizons these instruments are for investors looking for security and stable yields. Long term bonds often give slightly higher yields for those with a longer timeframe.
Managing interest rate risk with Government Bonds
Interest rates affect bond prices but high credit quality means stability. Strategic maturity selection gives you yield and risk so you get dependable, secure returns as a hedge for conservative investors in volatile markets.
Why invest in Australian Government Bonds in 2025
Government Bonds give you safety, steady income and long term reliability especially in uncertain markets. Their AAA credit rating reflects the highest level of trust in Australia’s fiscal strength.
For conservative investors government bonds put financial security first. This stable asset class gives you a steady income stream and preserves your capital so it’s a core holding for your portfolio in 2025.
World Bank AUD Global Bonds
World Bank AUD Global Bonds are stable, socially responsible investments. Backed by the AAA rated World Bank these bonds give you safety while supporting global development and sustainable goals.
Denominated in Australian dollars (AUD) these bonds give you returns while supporting sustainable development goals. Their consistent performance makes them a great investment for those looking for financial growth and social responsibility.
World Bank AUD Global Bonds 2025 Market Stats
As of 23 Jan 2025
Price: AUD 102.75 per bond. Demand driven.
1 Year Change: 1.8%. Volatility proof.
Average Daily Volume: 3.2k. Strong investor interest and liquidity.
What’s in World Bank AUD Global Bonds
World Bank AUD Global Bonds fund socially impactful projects, clean energy, education and health initiatives globally. Issued by the International Bank for Reconstruction and Development (IBRD) they have the World Bank’s AAA credit rating.
Denominated in AUD means Australian investors are protected from currency risk so returns are consistent. Designed for long term investors these bonds are for those looking for steady income while making a positive impact.
Managing interest rate risk with World Bank AUD Global Bonds
Interest rates may fluctuate but World Bank’s high credit quality bonds reduce risk. Diversified portfolios and tight management means stable yields. Low equity correlation means performance and returns are consistent regardless of market conditions.
Why World Bank AUD Global Bonds in 2025
World Bank AUD Global Bonds give you the benefit of financial stability and social impact. A low risk investment with global benefits that aligns with your values and financial goals.
For conservative investors these bonds give you predictable returns while supporting sustainable development. Capital preservation, ethical alignment and steady income means they’re a great addition to your diversified portfolio in 2025.
NBN Co Bonds
NBN Co Bonds are a stable investment for Australian investors looking for steady income with moderate risk in 2025. Issued by NBN Co, the government owned corporation that manages the National Broadband Network (NBN) they give you cash flow and financial security.
NBN Co Bonds 2025 Market Stats
As of 23 Jan 2025 NBN Co Bonds are:
Price: $101.25 per bond.
1 Year Change: 1.8%. Stable and fixed income market.
Average Daily Volume: 2k. Strong demand and moderate liquidity.
What’s in NBN Co Bonds
Government backed means solid credit and lower default risk. 5-10 year maturities and fixed coupon rates means stable and predictable income for investors.
The bonds benefit from NBN’s role in Australia’s communications infrastructure. Backed by government revenue from NBN’s growing customer base NBN Co Bonds are for risk averse investors looking for stable long term returns and financial security.
Managing interest rate risk with NBN Co Bonds
Rising interest rates may impact bond prices but NBN Co Bonds are generally resilient due to government backing and predictable cash flow. The fixed interest rates means investors are protected from broader economic volatility and the investment is stable.
Why NBN Co Bonds in 2025
NBN Co Bonds are for investors looking for security, reliability and moderate returns. Government backed bonds give you a steady income stream if you want stable financial growth in uncertain markets.
These bonds give you consistent cash flow so are attractive to risk averse investors. Resilient to interest rate fluctuations and economic volatility NBN Co Bonds are for those who want long term financial stability.
Corporate Bonds
Corporate bonds are a good option for investors looking for higher income with moderate risk in 2025. They give you access to a diversified portfolio of corporate debt securities so a balanced option if you’re willing to take on more risk than government bonds.
Corporate Bonds 2025 Market Stats
As of 23 Jan 2025 corporate bonds are:
Price: $100 per unit depending on the company’s credit rating.
1 Year Change: 3%. Investors are confident in creditworthy issuers despite market fluctuations.
Average Daily Volume: 3,000. Strong liquidity and institutional participation. Corporate bonds are in line with market sentiment and stable growth.
What’s in Corporate Bonds
Corporate bonds target debt from companies across various industries from high grade (investment grade) to high risk (high yield) issuers. Investment grade bonds (BBB and above) give you security while high yield bonds give you better returns.
Corporate bond portfolios with 5-10 year duration balance yield and risk. They give you steady income and diversify across sectors like utilities, technology and financials so moderate risk investors can get consistent income and long term growth.
Managing credit and interest rate risk
Interest rates impact corporate bonds especially during rate rises. To mitigate this risk invest in bonds with shorter duration or higher quality issuers. Diversification and selection reduces credit risk and volatility.
Why Corporate Bonds in 2025
Corporate bonds offer higher yield than government bonds, safety with more return. They give you portfolio diversification and income stability for moderate risk investors.
With professional management and diversification corporate bonds give you better returns. So they’re a good option for those looking for consistent income and moderate growth in a complex and volatile market.
Please note that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly on our website, blogs , newsletters.
Fixed Interest ETFs
Fixed Interest ETFs give you predictable income and capital stability by investing in government, corporate and international bonds. In 2025 these ETFs give conservative investors steady income and reduce portfolio volatility.
Fixed Interest ETF 2025 Market Stats
As of 23 Jan 2025 fixed interest ETFs are:
Price: Many fixed interest ETFs are priced competitively depending on the underlying bonds and fund strategy.
1 Year Change: 3.2% for top performing funds. They’re delivering consistent returns in volatile markets.
Average Daily Volume: Fixed interest ETFs have good liquidity with an average daily volume of 5k to 20k units.
What’s in Fixed Interest ETFs
Fixed interest ETFs invest in high grade corporate bonds, government bonds and inflation linked bonds. They give you broad exposure to different interest rate environments and reduce risk by diversifying across issuers and securities.
These ETFs invest in bonds with different maturities, balancing stability and yield. With a weighted average maturity they give you diversified exposure, steady returns and credit volatility protection making them a good option in 2025.
Interest Rate Risk with Fixed Interest ETFs
Interest rate rises can fall bond prices but many fixed interest ETFs mitigate this risk by investing in short duration bonds or government securities so you get stability during market volatility and interest rate changes.
Why Fixed Interest ETFs in 2025
Fixed interest ETFs are good in 2025 for investors looking for stability, low risk income and capital preservation. Their bond portfolios are designed for conservative investors who want steady cash flow and market protection.
In volatile markets these ETFs are a safe haven, wealth preservation and consistent returns. Their predictable income and capital protection makes them a good option for conservative portfolios.
Floating Rate Notes (FRNs)
Floating Rate Notes (FRNs) are becoming a good option for investors looking for flexibility and interest rate protection in 2025. These debt instruments have variable interest rates that change periodically based on benchmark rates, a hedge against rising interest rates and ongoing income.
FRN 2025 Market Stats
As of 23 Jan 2025 FRNs are:
Interest Rate: FRNs are pegged to benchmarks like 3-month BBSW (Bank Bill Swap Rate), usually at a premium to this rate.
1 Year Change: 3.8% increase in yield over the past year, good for yield hungry investors.
Average Daily Volume: 2,000 units per day, moderate liquidity for institutional and retail investors.
What’s in FRNs
FRNs are debt instruments issued by governments and corporates, with variable rates that move with short term interest rate markets. This means the value of FRNs will adjust with the rates.
The variable rate mechanism has a fixed spread over the reference rate, stability in volatile markets. This is good for investors looking for inflation and interest rate protection and minimising credit risk.
Interest Rate Risk with FRNs
FRNs offset rising interest rates by adjusting the coupon payments according to the benchmark rates, protecting the investor from losses in fixed rate bonds. Regular yield recalibration minimises capital depreciation and gives better returns.
Why Floating Rate Notes (FRNs) in 2025
FRNs are good for investors who want to hedge against interest rate rises and get competitive returns. Their structure gives consistent income especially in uncertain economic times, stability in volatile markets.
As interest rates rise in 2025, FRNs give growth through adjustable coupon payments. They give inflation protection and predictable income, perfect for portfolios focused on managing interest rate risk.
Diversified Bond Portfolios
Diversified bond portfolios are a must have in 2025, a balanced approach to getting consistent income and managing risk. By spreading investments across different bond types, these portfolios aim to reduce risk and stabilise returns, good for risk averse investors.
Diversified Bond Portfolios 2025 Market Stats
As of 23 Jan 2025 diversified bond portfolios are:
Price: Portfolios yield a range of returns, conservative options 3-5% p.a.
1 Year Change: Positive, 4% average, showing resilience and moderate growth.
Average Portfolio Volume: Liquidity varies by investor, stable interest from institutional and retail investors, tracking bond indices for stability and risk adjusted returns.
What’s in Diversified Bond Portfolios
A diversified bond portfolio has government, corporate and international bonds of different maturities and risk levels. This broad diversification reduces single bond risk and sector risk, gives overall portfolio stability.
By having bonds of different durations, these portfolios gives flexibility and consistent income streams. Good for conservative investors who want steady income with controlled risk, stability in any market conditions.
Risk Management with Diversified Bond Portfolios
Interest rate, inflation and credit risk can affect bond portfolios. Diversification across bond types, sectors and maturities reduces risk, makes it resilient. In rising rates, shorter duration bonds reduces exposure, gives stable and competitive yields.
Why Diversified Bond Portfolios in 2025
Diversified bond portfolios gives long term income with low risk, perfect for conservative investors. By spreading investments across different bond types, they gives consistent returns and reduces volatility and exposure.
In 2025 these portfolios gives balanced growth, attractive yields and reduced risk in uncertain economic times. With broad diversification they are a must have in portfolios, gives stability and better returns for risk averse investors.
FAQs
How do I invest in Australian bonds in 2025?
In 2025 you can buy Australian government bonds directly through brokers or on the ASX. Government bonds are also available through managed funds and ETFs. Direct purchase has low fees but requires a broker account.
Government bonds are popular for their safety and reliability, gives steady returns. ETFs and managed funds makes investing easy, gives diversified exposure to government bonds, good for investors who want minimal management and risk.
What bond ETFs to consider in Australia for 2025?
For 2025 consider BOND (ASX: BOND) and ALTB (ASX: ALTB) both are popular ETFs that focus on high quality bonds.
BOND gives exposure to Australian government, semi-government and corporate bonds. ALTB is focused on long term government bonds, good for risk averse investors. These ETFs are for diversified portfolios.
Is fixed or floating rate bonds better in 2025?
Fixed rate bonds gives predictable interest payments but may suffer if interest rates rise. Floating rate bonds like FLOT (ASX: FLOT) adjusts to interest rate changes.
Floating rate bonds is good in rising rate environment, gives higher income when rates go up. Fixed rate bonds still has its appeal for income consistency but can underperform when inflation or rates rise sharply.
Which Australian banks has the best corporate bonds in 2025?
In 2025, major banks like CBA, Westpac and ANZ has some of the best corporate bonds. They gives secure and relatively high returns due to their high credit ratings.
These banks regularly issues bonds that are included in many corporate bond ETFs and funds. Investors can look for those with higher ratings or better terms, gives steady returns from quality banks.
How do I decide between short term and long term bonds in Australia?
Short term bonds (under 5 years) is lower risk but lower returns. Long term bonds (10+ years) is higher returns but more interest rate risk.
Short term vs long term bonds depends on your risk tolerance and investment time frame. Short term is good for conservative investors or those who needs liquidity, long term is good for those who wants higher yields and income stability.
What is the return of Australian bonds in 2025?
Return of Australian bonds in 2025 varies by bond type and maturity but ranges from 2% to 4%. Long term government and corporate bonds may give slightly higher returns.
In general Australian bonds gives stable and relatively low returns compared to equities or other higher risk assets. Return depends on bond maturity, interest rates and economic conditions that affects Australia’s credit market in 2025.
Can I buy bonds through my super fund in 2025?
Yes you can buy bonds through your super fund in 2025. Many super funds offers access to bond ETFs, direct bonds or managed funds that holds bonds in their portfolio.
Bond investment in a super fund gives tax advantages such as deferred tax on interest income. By choosing funds or ETFs with high bond exposure, you can get steady income in retirement.
What are the risks of investing in bonds in Australia in 2025?
Risks of investing in Australian bonds in 2025 are interest rate risk, credit risk and inflation. Rising interest rates can reduce the value of existing bonds especially long term ones.
Inflation can erode real returns of fixed rate bonds and bond defaults is always a risk especially with corporate bonds. Diversification across bonds of different maturities can reduce overall risk in the portfolio.
How do interest rate changes in 2025 affect bond investments in Australia?
Interest rate changes in 2025 affects bond prices. If rates go up, existing bonds with lower fixed rates becomes less attractive and their prices will fall. This affects long term bond investors.
On the other hand, short term bonds is less sensitive to interest rate changes. Floating rate bonds like those in VanEck FLOT adjusts to rate hike, makes them a popular choice during rising rate environment in 2025.
Are Australian green bonds good for 2025?
Australian green bonds used to fund environmentally friendly projects can be good for socially responsible investors in 2025. They often gives competitive yields and aligned with ethical investment.
These bonds are issued by both government agencies and private companies to support clean energy and environmental initiatives. Although the returns may not be the highest, the social impact and growing demand makes them a good portfolio addition.
What are the tax implications of buying bonds in Australia?
Interest income from Australian bonds is generally taxed at the investor’s marginal tax rate, capital gain from selling bonds is taxed as capital gains tax. Taxation depends on holding period.
For bonds held more than 12 months, only half of the capital gain is taxed under capital gains tax discount. Investors can improve tax efficiency by holding bonds in tax advantaged accounts like superannuation.
How do Australian bond yields compare to international bonds in 2025?
Australian bond yields are generally higher than many developed countries due to Australia’s higher interest rates. But yields are often lower than emerging markets in 2025.
Global bonds may give higher returns especially in developing countries but comes with higher risk. Australian bonds is a balanced investment with lower risk and reasonable returns in a stable market.
What is the minimum investment for Australian bonds in 2025?
Minimum investment for Australian bonds in 2025 depends on the issuer or fund. For government bonds, it can start as low as $1,000 while some corporate bonds requires higher investment.
Most bond ETFs and managed funds have minimum investment threshold from a few hundred dollars to a couple of thousand. So bond investing is accessible even for retail investors with smaller amount.
Can retail investors buy exchange-traded bonds in Australia?
Yes, retail investors can buy exchange-traded bonds in Australia through platforms that allows bond ETF buying on the ASX. These are flexible and liquid way to invest in bonds.
Exchange-traded bonds (ETBs) is ideal for smaller investors, allows access to many bonds without the hassle of buying individual bonds. Bond ETFs is popular among Australian investors for its ease of use.
What sectors are issuing the most corporate bonds in Australia in 2025?
In 2025, major sectors issuing corporate bonds in Australia are banking, infrastructure, real estate and utilities. These sectors tend to issue bonds with stable yields and lower risk.
Banking sector dominates corporate bond issuance due to its high credit ratings and demand for capital. Infrastructure projects and utility companies, often backed by government contracts, presents investment opportunities for conservative investors.
How do I diversify my bond portfolio in Australia?
To diversify a bond portfolio in Australia, investors can mix government, corporate and floating-rate bonds. Bond ETFs is ideal for spreading risk across different issuers and bond types.
Having bonds of different maturities, sectors and credit ratings will create a balanced portfolio. It’s also important to have both fixed-rate and floating-rate bonds to hedge against interest rate risk in 2025.
Are inflation-linked bonds a safe choice in 2025?
Inflation-linked bonds are safe against inflation risk in 2025 as their returns will adjust with inflation rates, maintains purchasing power. These are good during high inflation periods.
But their yield is lower than fixed-rate bonds as they offer protection against inflation. In stable or low-inflation environment, these bonds may underperform other fixed-income options.
Which are the best Australian bond ETFs in 2025?
Best Australian bond ETFs in 2025 are SPDR S&P/ASX Australian Bond Fund (ASX: BOND) and iShares 15+ Year Australian Government Bond ETF (ASX: ALTB). Both are stable.
These ETFs offers diversification, low fees and high-credit quality bonds, perfect for investors looking for consistent returns with minimal interest rate and credit risk.
Originally Published: https://www.starinvestment.com.au/10-best-bonds-to-invest-in-2025-australia/
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