Global X Bank Credit ETF doubles assets as profit reaches $6.9 million

Assets and investor capital more than doubled

Global X Australian Bank Credit ETF (ASX:BANK) finished its second financial year with net assets of AUD 184.006 million, up from AUD 91.460 million. Its investment portfolio expanded to AUD 182.696 million, compared with AUD 90.746 million a year earlier.

The increase was driven primarily by fresh investor applications of AUD 104.876 million. That was partly offset by AUD 10.984 million of redemptions, while AUD 8.330 million was paid or payable in distributions. The unit count increased from 9.204 million to 18.610 million over the year.

Profit rose, but fair value gains remained negative

Profit for the year climbed to AUD 6.921 million from AUD 1.976 million. Dividends and distribution income rose to AUD 2.308 million, while other income reached AUD 5.562 million. Those gains were partly reduced by a net AUD 522,000 loss on financial instruments measured at fair value through profit or loss.

The result came after AUD 427,000 in operating expenses, including AUD 389,000 of management fees. The fee is calculated at 0.25% a year on the value of units in issue, inclusive of GST and net of applicable reduced input tax credits.

Credit portfolio carries more BBB-rated exposure

The fund held AUD 109.949 million in floating-rate bonds, AUD 16.336 million in fixed-rate bonds and AUD 56.410 million in listed hybrid securities at year-end. All investments were classified as Level 1 fair values, meaning the report says they were based on quoted prices in active markets.

The portfolio's credit mix shifted during the year. AA-rated debt represented 45.55% of the bond portfolio and A-rated debt 33.70%, while BBB-rated holdings rose to 20.75% from 4.79%. The Responsible Entity says the fund invests in investment-grade instruments and monitors the credit ratings of securities and counterparties.

Distributions remain a central part of the return

Distributions paid or payable more than tripled to AUD 8.330 million from AUD 2.571 million. A further AUD 3.201 million remained payable at 30 June 2026, including AUD 3.190 million attributed to the June distribution. That distribution was paid to entitled unitholders on 16 July 2026.

The audited report received an unmodified opinion from Ernst & Young. The auditor identified the existence and valuation of the AUD 182.696 million investment portfolio as the key audit matter, given its size relative to total assets and the potential effect of market pricing on the reported value.

Interest-rate sensitivity has widened with the portfolio

The report estimates that a 100-basis-point change in interest rates would have affected operating profit and net assets by AUD 12.629 million in either direction at 30 June 2026. The comparable sensitivity was AUD 634,000 in the previous year, reflecting the fund's substantially larger asset base.

The filing contains no change to the investment strategy and no significant subsequent event beyond the June distribution. For investors, the next test is whether the larger portfolio can continue generating income while its increased BBB exposure and interest-rate sensitivity remain compatible with the fund's intended risk profile.