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Views on the BetaShares Australian Invest Grade Bond ETF (CRED)

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    Views on the BetaShares Australian Invest Grade Bond ETF (CRED)

    Please give your views on CRED including: 1) whether or not you like it; 2) whether you think now or a lower price target is a good time to buy it; and 3) how you expect it to perform going forward in the current environment with respect to price performance/yield, including with regard to your expectations for interest rates over the medium to long term.

    Answer

    Hi Darren,

    As we believe the bond yield rally is maturing fast we do like the BetaShares Austinvest Grade Corp Bond ETF (CRED).

    1. we like it in the 21.5 to 22 area initially targeting a bounce towards 23.
    2. however the medium term trend is clearly down hence we would take profit or at least reduce into such a rally.
    3. this ETF has a running yield of 3.62% with a yield to maturity of 5.95% which tells you a lot of their holdings are trading below issue price.
    4. the expected yield pick up is through some capital gain in their holdings, for a higher running yield. buying bonds directly may be a better way to go.
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    BetaShares AustInvest Grade CorpBond ETF (CRED)
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