Home/Bonds & Fixed Income/HBRD

HBRD

$10.08+0%Bonds & Fixed Income42/100
Fund Page ↗

BetaShares Active Australian Hybrids Fund · BetaShares

Data as at 29 March 2026

TL;DR

Tracks Australian bank hybrid securities — instruments that sit between bonds and equity in the capital structure, issued by the major banks to meet regulatory capital requirements.

MER (Annual Fee)
0.45%
#6 lowest in Bonds & Fixed Income
1Y Return
+4.6%
3Y Return (p.a.)
+5.9%
Dividend Yield
-
Non-distributing
AUM
$1,700M
Assets under management
Avg Daily Turnover
$1.6M
Avg shares × unit price
Unit Price
$10.08
As at 29 March 2026
Provider
BetaShares
Loading chart…

Strategy

Invests in Additional Tier 1 (AT1) capital instruments issued primarily by CBA, NAB, Westpac, ANZ, and Macquarie. These are actively managed by Coolabah Capital under a BetaShares wrapper.

Top Holdings

Key Fact

Bank hybrid securities exist because Australian banking regulation requires banks to hold a buffer of capital that can absorb losses before the government or taxpayers would need to intervene. HBRD's holdings are specifically the instruments that provide this buffer.

Suited for

Income-focused investors who want higher yield than standard bank bonds or deposits. Hybrid securities typically pay 2-4% above the bank bill rate, but come with conditions attached to that income.

Risks

Bank hybrid securities are designed to absorb losses during a bank capital crisis — that is their regulatory purpose. They can be converted to equity or written off entirely if a bank's capital ratio falls below a trigger level. They are not as safe as senior bank bonds.

ETFCheck Score42/100
Fees (40%)33
Fund Size (25%)57
Liquidity (20%)74
Yield (15%)0
How scores are calculated →
Other Bonds & Fixed Income ETFs
VAF
0.20% MER
67
CRED
0.25% MER
67
QPON
0.22% MER
67
IAF
0.15% MER
66
VGB
0.20% MER
61View all Bonds & Fixed Income ETFs →

Frequently Asked Questions - HBRD

Why does HBRD require active management when most bond ETFs are passive?+
Bank-issued hybrid securities are structurally complex - they carry mandatory conversion triggers, call dates, and potential equity conversion if a bank's capital ratio falls below regulatory thresholds. HBRD's active managers at BetaShares assess these risks across individual hybrid issues, timing purchases around call dates and managing concentration risk. This justifies the 0.45% MER, significantly higher than passive bond ETFs, as mispricing and structural risks in the hybrid market require specialist expertise.
What are the risks of HBRD converting to bank equity during a financial crisis?+
Australian bank hybrids contain contractual triggers that force conversion to ordinary shares if a bank's Common Equity Tier 1 ratio falls below 5.125%, or if APRA declares a non-viability event. In such scenarios, HBRD investors would receive bank equity at distressed prices, potentially suffering severe capital losses. While this risk has never materialised for Australian major banks, it means HBRD behaves more like equity than bonds during systemic stress - a key consideration for SMSF asset allocation compliance.
Are franking credits available on HBRD distributions for Australian investors?+
Yes, a portion of HBRD's distributions typically includes franking credits because many underlying hybrid securities pay franked distributions, similar to bank dividends. This is a significant tax advantage for Australian investors, particularly SMSFs in pension phase where franking credits can generate cash refunds from the ATO. The 5.85% headline yield effectively understates the after-tax return for investors who can fully utilise these franking credits in their tax position.
How does HBRD compare to buying individual bank hybrids directly on the ASX?+
HBRD provides diversified exposure across approximately 30 hybrid securities with active risk management, whereas buying individual hybrids concentrates your risk in specific issues with unique call dates and conversion terms. Many retail investors misjudge hybrid pricing around call dates or misunderstand reset margin mechanics, leading to unexpected losses. HBRD's 0.45% MER buys professional management, automatic reinvestment of called securities, and diversification that would require significant capital and expertise to replicate independently.