IAF AU
IAF ETF: How Ishares Core Composite Bond ETF Works
Price data last refreshed:
The IAF ETF, or the iShares Core Composite Bond ETF to use the full name, gives investors exposure to investment-grade Australian fixed income. For Australian investors, the key question is not just what the fund holds, but whether it works as the right defensive portfolio building block compared with alternatives like VAF, VGB or even cash-style ETFs.
What it does: Broad exposure to investment-grade Australian bonds via a single ASX-listed ETF.
Who it may suit: Investors looking for a core defensive allocation rather than a pure cash holding.
Main local issue for Australians: The big decision is usually not access, but whether to choose a broad bond ETF, a government-bond ETF, or a cash ETF instead.
Best Australian-listed alternative: VAF is the closest like-for-like rival; VGB and AAA suit different defensive roles.
Can Australians buy this ETF?
Short answer: Yes. IAF is an Australian-domiciled ETF listed on the ASX and designed specifically for local investors.
Australian investors should check four things before buying this ETF:
- Where it is listed: ASX
- Fund domicile: Australia
- Whether there is an ASX or Cboe Australia equivalent: Yes, VAF is the closest local rival, while VGB and AAA are adjacent defensive alternatives.
- Whether the exposure is hedged or unhedged to AUD: The portfolio is already mostly in Australian-dollar bonds, so foreign currency risk is not the main issue here.
For most Australians, access is straightforward. IAF trades on the ASX, is Australian-domiciled, and BlackRock Australia provides the usual local issuer documentation including the PDS and TMD.
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The more important portfolio question is whether you want broad Australian fixed income, a government-bond-heavy defensive sleeve, or something closer to cash. That is where IAF needs to be compared with products like VAF, VGB and AAA.
IAF ETF at a glance
IAF is designed for income and portfolio defence, not for equity-like capital growth. Investors should judge it more on yield, drawdown behaviour and diversification value than on raw return compared with shares.
What does the ETF actually do?
IAF aims to provide investors with the performance of the Bloomberg AusBond Composite 0+ Yr Index, before fees and expenses. That index is designed to measure the broad Australian bond market and includes investment-grade fixed income securities issued by the Australian Treasury, Australian semi-government entities, supranational and sovereign issuers, and corporate issuers.
For Australians, that makes IAF a practical way to get a core local bond allocation in one trade. Instead of buying individual bonds or relying on term deposits and cash alone, investors can use IAF to access a diversified basket of Australian investment-grade bonds.
What IAF is not is a cash ETF, a high-yield bond ETF, or a pure government-bond ETF. It sits in the middle: broader than government-only exposure, but higher quality than credit-heavy income products.
What is inside the fund?
IAF holds a broad mix of Australian bond exposures across government, semi-government and corporate issuers. That diversification matters because the fund is designed to represent the broader Australian fixed income market rather than one narrow corner of it.
Overview
The iShares Core Composite Bond ETF (IAF) is an Australian-listed ETF focused on bonds. Its profile combines quarterly distributions with a portfolio whose disclosed leading positions are Commonwealth of Australia bonds. The reported returns vary across the supplied periods, underscoring that bond funds can experience both gains and losses.
Category
IAF sits within the Australian fixed-income ETF theme, offering a way to research bond exposure alongside share-market investments. Its supplied holdings data is weighted toward Commonwealth of Australia bonds among the listed positions.
Bond ETFs offer exposure to fixed-income markets, where prices can move as interest-rate expectations and inflation conditions change. Australian government and semi-government bonds are a prominent part of the local bond market, while the supplied IAF holdings highlight Commonwealth government bonds.
Key facts
- Ticker
- IAF
- Exchange
- AU
- ISIN
- AU000000IAF5
- Provider
- BlackRock Investment Management (Australia) Limite
- Domicile
- Australia
- Currency
- AUD
- Inception date
- 2012-03-12
- Use of income
- Quarterly
- UCITS
- No
- Holdings count
- 7
Costs
- TER
- 0.24%
- Ongoing charge
- 0.24%
- Net expense ratio
- 0.24%
- AUM
- 3.7B
The supplied profile shows an ongoing charge of 0.24%. This is a recurring fund cost and should be considered alongside the ETF’s holdings, income pattern and risks.
Performance
- YTD
- 1.0%
- 1 year
- -0.4%
- 3 years
- 3.6%
- 5 years
- 0.0%
- 10 years
- 1.4%
- Dividend yield
- 3.15%
- Top 10 concentration
- 18.6%
Holdings
-
Australia (Commonwealth of) 2.5%2.92%
-
Australia (Commonwealth of) 4.75%2.71%
-
Australia (Commonwealth of) 4.25%2.82%
-
Australia (Commonwealth of) 3.25%2.60%
-
Australia (Commonwealth of) 5.5%2.52%
-
Australia (Commonwealth of) 1%2.51%
-
Australia (Commonwealth of) 2.75%2.55%
Weights are percentages of the fund; bars use a 0–100% scale. Displayed entries may not cover the whole portfolio.
The disclosed top holdings are Commonwealth of Australia bonds with several different coupon rates. The largest listed position is the 2.5% bond at 2.921% of the portfolio; the displayed top-ten concentration is 18.625%.
Risks
Who it may suit
IAF may be of interest to Australian investors researching bond ETFs and fixed-income exposure. Its quarterly distributions and government-bond positions may be relevant to those comparing income-oriented funds, while its price can still fluctuate. This is general information, not a recommendation.
Key risks
Bond prices can fall when market interest rates rise, and inflation can reduce the purchasing power of income and principal. Credit conditions, market liquidity and changes in the value of the Australian dollar may also affect returns. Distributions can vary, and past performance does not assure future results.
FAQ
What does IAF invest in?
IAF is an Australian bond ETF. The supplied holdings data lists Commonwealth of Australia bonds among its largest disclosed positions.
How often does IAF distribute income?
The supplied fund data indicates quarterly distributions. The displayed dividend yield is 3.15%; yield can change and does not guarantee future income.
Does IAF have a verified benchmark in the supplied data?
No benchmark is verified in the supplied profile data.
*This content is aimed to provide general information only, and does not take your personal objectives, financial situation or needs into account.
