VAFvsIAF
Two leading Australian fixed income ETFs. How do they compare?
Vanguard Australian Fixed Interest Index ETF · iShares Core Composite Bond ETF
VAF and IAF both track the Australian investment-grade bond market. IAF is 5bp cheaper at 0.15%. For fixed income, the fee gap is particularly important as yields are already low - every basis point of fee saved flows straight to net return.
Score Breakdown
Fund Profiles
Vanguard manages VAF, an ASX-listed bond ETF tracking the Bloomberg AusBond Composite 0+ Yr Index, providing diversified exposure to Australian investment-grade fixed income securities. The fund holds a mix of Australian government and corporate bonds with a relatively long duration profile, making it sensitive to interest rate movements - rising rates will generally push unit prices lower, and vice versa. Conservative investors seeking portfolio ballast, capital preservation, and steady income alongside their equity holdings will find VAF a core Australian fixed income building block.
Managed by BlackRock under the iShares brand, IAF tracks the Bloomberg AusBond Composite 0+ Year Index, providing broad exposure to Australian investment-grade government and corporate bonds. The fund covers a wide range of maturities and is near-identical in exposure to Vanguard's VAF, with the primary differences being minor fee variations and issuer preference. IAF suits defensive investors and retirees seeking steady income and capital preservation, and is commonly used within SMSF portfolios as a counterbalance to equity volatility.