BetaShares Australian Bank Senior Floating Rate Bond ETF (QPON) $26.18

The QPON Floating Rate Bond ETF is an ASX-listed ETF that invests primarily in senior floating-rate bonds issued by major Australian banks, designed to provide regular income with relatively low interest-rate risk. The ETF pays monthly distributions and currently yields around ~4.2%, with income moving broadly in line with short-term interest rates.

The key difference from fixed-rate bond ETFs like the VAF is that QPON’s bond coupons reset periodically as interest rates change, meaning the income rises when rates rise and falls when rates fall – and therefore, does not have a direct impact on the price of the ETF. In contrast, fixed-rate bonds pay a set coupon, so their prices tend to fall when interest rates rise and vice versa when rates fall, making floating-rate ETFs like QPON more attractive in rising-rate environments.

• We can see the QPON ETF slowly losing its lustre compared to the IAF in the coming months.