Global X cuts management fees across its fixed income ETFs

Leading ETF provider Global X ETFs Australia (formerly ETF Securities) has reduced the management fees of its two US fixed income funds, to provide investors with more cost-effective access to the US fixed income market.

Made effective as of October 10, 2022, the management fee for Global X US Treasury Bond ETF (Currency Hedged) (ASX Code: USTB) has been lowered from 0.3% to 0.2% and the management fee for Global X USD High Yield Bond ETF (Currency Hedged) (ASX Code: USHY) has been lowered from 0.55% to 0.4%.

Global X ETFs Australia CEO Evan Metcalf says the fee reductions are part of a wider review of the products in Global X’s fund range to ensure they are best in class and provide investors with the most efficient way of accessing different areas of the investment landscape.

“We are determined to offer our clients cost-efficient access to tactical and strategic solutions. We understand fixed income markets globally are difficult given the toll inflation and coordinated central banks rate action is taking on markets and the broader economy. But we see opportunities,” Metcalf said.

Global X US Treasury Bond ETF (Currency Hedged) tracks the iBoxx $ Treasuries Total Return Index, hedged into Australian dollars. The market for US government debt is the deepest and most liquid of any type of financial instrument, with more than US$23 trillion of outstanding Treasuries.

“Despite the scale of this market, Australian retail investors had no access to a pure play investment in US Treasuries until the Global X ETF was launched in July,” Metcalf added.

Meanwhile, the Global X USD High Yield Bond ETF (Currency Hedged) tracks the Solactive USD High Yield Corporates Total Market Index, hedged into Australia dollars and provides access to the attractive yields on offer in the sub-investment grade segment of the global bond market.

“As the Reserve Bank of Australia slows its rate increases, there have been calls that inflation may be nearing or at its peak, creating opportunities to start allocating back to fixed income. At the same time, the US Fed is maintaining its hawkish stance on rate increases and is steadfast on curbing inflation. We see this presenting potential market dislocations which our investors can leverage,” said Metcalf.

Last month ETF Securities rebranded to Global X ETFs, creating the preeminent leader in thematic, commodity, digital asset and income ETFs in the Australian market. The rebrand follows Mirae Asset and Global X’s acquisition of ETF Securities Australia in June 2022.

Meltcalf ended, “Global X ETFs Australia has since been communicating with clients and international counterparts as it considers how best to capitalise on Mirae Asset and Global X’s expertise and resources in bringing intelligent, innovative solutions to the local market.”