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A Guide to Exchange-Traded Australian Government Bonds

Nicholas Yaxley  |  19 Jun 2013Text size  Decrease  Increase  |  

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Nicholas Yaxley is a credit analyst at Morningstar.


- CHESS Depositary Interests (CDIs) - How They Work  
- Potential Conversion to Physical Bonds  
- Australian Office of Financial Management (AOFM)  
- Types of Commonwealth Government Securities  
- Why Do We Need Exchange-Traded Treasury Bonds?  
Understanding Market Pricing - Dirty vs. Clean Price  
Investment Risks  
- Duration: How to Measure Interest Rate Risk  
- Duration and Your Portfolio  
What is the Yield Curve?  
- The Shape of the Yield Curve  
- The Neutral Interest Rate  
Inflation and its Impact on Government Bonds  
- What is Inflation?  
- How Is Inflation Measured?  
- What are Exchange-traded Treasury Indexed Bonds (eTIB)?  
- Understanding Breakeven Inflation  
Pricing and Valuation  
Active vs. Passive Management  
- Passive Bond Strategy  
- Active Bond Strategy  
- Conclusion  
Appendix A - Security Detail  
Appendix B - Historical Yields  




In December 2010, the Federal Government announced the Competitive and Sustainable Banking System policy. As part of this policy, the government is developing reforms to create a deep and liquid corporate bond market. The first step of these reforms was legislation enacted on 17 November 2012 to enable retail investors to trade Commonwealth Government Securities on an exchange. This is designed to reduce the government's reliance on offshore funding and introduce some balance into the nation's superannuation system. As a result of this legislation, the Australian Securities Exchange (ASX) now provides investors with access to interests in Australian Government Bonds that can be traded on the ASX at any point prior to maturity.