BetaShares Australian Govt. Bond ETF (AGVT) $42.44

We believe local interest rates are set to fall into 2026; however, the current expectations are based on contained inflation with little to no economic weakness built into the equation. After a strong economic recovery since COVID, we believe a slowdown should not be discounted as the cost of living weighs on the consumer, and the US tariffs are only likely to make things worse. We like the AGVT ETF to position for this view as it yields 3.58% per annum while only costing 0.22% – we get a return on our money, sitting in Govt. bonds, waiting to see if we’re correct.  Fixed rate bond prices rise when interest rates fall, all else being equal.

• We like the risk/reward of this ETF initially targeting the $44 area. Note that from a percentage perspective, this is a conservative position, as is usually the case with bonds.