SPDR Fixed Income ETFs Slash Fees and Rebrand with iBoxx Index

Fee Reduction and Rebranding

State Street Global Advisors Australia Services Limited has unveiled a series of updates to its SPDR Fixed Income ETFs, notably the SPDR S&P/ASX Australian Bond ETF (ASX: BOND) and the SPDR S&P/ASX Australian Government Bond ETF (ASX: GOVT). Effective 20 June 2025, the management fee for the Australian Bond ETF will be reduced sharply from 0.24% to 0.10% per annum, aligning it with the Government Bond ETF's existing fee structure. This move enhances the cost competitiveness of the flagship bond fund in a fee-sensitive market.

Alongside the fee adjustment, both funds will adopt new names incorporating the 'iBoxx' index branding, becoming the SPDR S&P/ASX iBoxx Australian Bond ETF and SPDR S&P/ASX iBoxx Australian Government Bond ETF respectively. This rebranding reflects the funds’ tracking of the S&P/ASX iBoxx Australian Fixed Interest and Government Bond indices, providing investors with clearer insight into the underlying benchmarks.

Enhanced Transparency on Fund Features

The supplementary product disclosure statement elaborates on the investment objectives, index eligibility criteria, and sector allocations. The Australian Bond ETF aims to match the performance of the S&P/ASX iBoxx Australian Fixed Interest Diversified 0+ Index, which includes a diversified mix of government, semi-government, corporate, and covered bonds, all investment grade and issued in the Australian domestic market. The index equally weights government and semi-government bonds across three maturity buckets (0-5, 5-10, and 10+ years), each at 16.67%, with corporate and covered bonds comprising the remaining 50%.

The Government Bond ETF tracks the S&P/ASX iBoxx Australian & State Governments 0+ Index, focusing exclusively on investment-grade Australian Commonwealth and State government bonds. Both indices rebalance monthly, ensuring the funds maintain alignment with evolving market conditions.

Updated Fee and Transaction Cost Structures

The disclosure clarifies that management fees for the Australian Bond ETF will be capped at 0.10% per annum from June 2025, a substantial reduction from the prior 0.24%. The Government Bond ETF maintains its management fee at 0.10%. Transaction costs remain minimal, with estimates near zero, reflecting efficient trading and portfolio management. Stockbrokers acting as principals will continue to bear transaction fees related to applications and redemptions, which are retained within the fund and not paid to the responsible entity or investment manager.

Additional details on transaction fees for in specie and cash applications/redemptions are provided, including fixed and variable components that account for brokerage and bid-ask spreads. The responsible entity retains discretion to adjust these fees in response to market conditions, ensuring fairness and cost recovery without undue burden on investors.

Operational and Governance Updates

The registry provider for the funds has transitioned to MUFG Corporate Markets (AU) Limited, with updated contact details for investor communications and complaints. The responsible entity, State Street Global Advisors Australia Services Limited, continues to oversee fund management, supported by State Street Australia Limited as administrator and custodian. The funds operate under comprehensive governance frameworks, including compliance committees and adherence to ASX AQUA market rules.

Investors are reminded that while the funds aim to track their respective indices closely, returns are not guaranteed, and investment risks including market volatility, interest rate fluctuations, and liquidity constraints remain. The disclosure also updates disclaimers related to the indices, emphasizing that neither S&P Dow Jones Indices nor ASX endorse or guarantee the funds.