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IAF

$99.98-0.45%Bonds & Fixed Income66/100
Fund Page ↗

iShares Core Composite Bond ETF · BlackRock

Data as at 29 March 2026

TL;DR

BlackRock's Australian bond ETF tracking the same index as VAF at 0.15% per year — 5 basis points cheaper. Nearly identical portfolio to VAF with lower fees.

MER (Annual Fee)
0.15%
#1 lowest in Bonds & Fixed Income
1Y Return
+0.9%
3Y Return (p.a.)
+1.7%
Dividend Yield
3.02%
Trailing 12 months
AUM
$3,702.8M
Assets under management
Avg Daily Turnover
$2.8M
Avg shares × unit price
Unit Price
$99.98
As at 29 March 2026
Provider
BlackRock
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Strategy

Tracks the Bloomberg AusBond Composite 0+ Yr Index using full physical replication. Managed by BlackRock (iShares). Holds the same Australian government and corporate bonds as VAF at marginally lower cost.

Top Holdings

Key Fact

IAF and VAF both track the Bloomberg AusBond Composite 0+ Yr Index. On a $200,000 holding over 20 years, the 0.05% annual fee difference between them compounds to approximately $3,000 in additional returns — assuming identical performance before fees.

Suited for

Cost-conscious investors wanting broad Australian bond market exposure who prefer BlackRock's fund management. The 0.05% annual fee saving versus VAF compounds over time on larger balances.

Risks

Same interest rate duration risk as VAF. Rising rates cause the fund's value to fall proportionally to its average duration of approximately 5-6 years.

IAF Comparisons

ETFCheck Score66/100
Fees (40%)78
Fund Size (25%)69
Liquidity (20%)41
Yield (15%)61
How scores are calculated →
Other Bonds & Fixed Income ETFs
VAF
0.20% MER
67
CRED
0.25% MER
67
QPON
0.22% MER
67
VGB
0.20% MER
61
HBRD
0.45% MER
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Frequently Asked Questions - IAF

How does IAF compare to VAF for Australian bond exposure?+
IAF and VAF both track the Bloomberg AusBond Composite Index, delivering virtually identical returns - IAF returned around 4% over the past year. Both charge an MER of 0.15%, so the real differentiators are bid-ask spreads and trading liquidity on ASX. Many SMSF investors split between both for issuer diversification across BlackRock and Vanguard, reducing single-provider operational risk in their fixed income allocation.
Why did IAF lose value when interest rates rose in 2022–2023?+
IAF holds a portfolio of government and corporate bonds with an average duration of around 5–6 years, meaning its price falls roughly 5–6% for every 1% rise in yields. During the RBA's aggressive hiking cycle, this duration exposure caused meaningful capital losses that offset coupon income. Investors seeking bond exposure with less interest rate sensitivity might consider shorter-duration or floating-rate alternatives like QPON on the ASX.
How is income from IAF taxed for Australian investors?+
IAF distributes interest income monthly, which is fully taxable at your marginal tax rate - there are no franking credits since bond coupons are not dividends. For SMSF members in pension phase, distributions are received tax-free, making IAF an efficient defensive allocation. Capital gains or losses from selling IAF units on the ASX are subject to standard CGT rules, including the 50% discount for holdings beyond 12 months.
Is IAF suitable as a cash alternative in an SMSF portfolio?+
IAF is not a direct cash substitute because its price fluctuates with interest rate movements, and you can experience short-term capital losses. However, its 3.35% yield and high credit quality make it suitable as a conservative allocation step above cash for SMSF trustees with a 2–3 year minimum time horizon. For true capital stability, pairing IAF with a high-interest cash ETF or term deposit may better manage liquidity needs.