ASX, in collaboration with Bloomberg Indices, launched Australia’s first exchange-traded Bond and Credit Index Futures, giving institutional investors a simpler way to access and manage exposure to Australian fixed income markets.

The new contracts are based on the Bloomberg AusBond Composite Index (BACM0) and Bloomberg AusBond Credit Index (BACR0), two widely used index benchmarks across Australia’s fixed income market. One tracks a broad mix of Australian bonds, including government, semi-government, supranational and corporate bonds, while the other focuses on Australian corporate bonds.

Together, the indices are tracked by more than A$60 billion in assets and are used by asset managers, ETF issuers, superannuation funds and other institutional investors.

By using these contracts, investors can manage risk or gain market exposure without needing to buy or sell a large number of individual bonds. This can help fund managers, superannuation funds and ETF issuers manage portfolios more efficiently, particularly when responding to market movements, managing cash flows or adjusting fixed income exposure.

The launch brings a globally established product structure to Australia and expands ASX’s interest rate derivatives offering, introducing the first exchange-traded futures contracts over Bloomberg AusBond Indices.

Both indices were established in 1989 and are recognised benchmarks across the Australian fixed income market. The contracts are designed to support a range of investment and risk management applications, including portfolio hedging, liquidity management and cash equitisation. They also provide investors with an exchange-traded way to access Australian credit market exposure through a single instrument.

Daniel Sinclair, ASX Acting Group Executive, Markets, said the launch was an important development for Australia’s fixed income market.

“The launch of Bond and Credit Index Futures is an important evolution of ASX’s interest rate derivatives offering and adds to the range of risk management tools available to market participants.

“These contracts provide investors with a transparent and efficient way to gain or manage exposure to Australian fixed income index benchmarks already widely adopted across Australia’s institutional investment market.

“By combining ASX’s market infrastructure with Bloomberg’s leading fixed income indices, analytics and global reach, we are delivering new opportunities for investors and are supporting the continued development of Australia’s fixed income market.”

Fateen Sharaby, Head of Index Derivatives, Bloomberg Index Services Limited, said:

“The Bloomberg AusBond Indices have long served as important benchmarks for Australia’s fixed income market and are used by investors across the region.

“With this collaboration, ASX is bringing new exchange-traded tools to market that can help investors manage portfolios, hedge risk and access fixed income markets more efficiently.

“This launch combines Bloomberg’s benchmark, pricing and analytics capabilities with ASX’s market infrastructure, expanding the tools available to market participants.”

The launch follows extensive engagement with domestic and international market participants, including banks, asset managers, ETF issuers and superannuation funds, and comes amid growing global demand for fixed income index futures. Similar products have gained traction in offshore markets, highlighting increasing demand for exchange-traded tools linked to fixed income and credit benchmarks.

About the contracts

ASX Bond and Credit Index Futures are futures contracts based on the Bloomberg AusBond Composite Bond Index and Bloomberg AusBond Credit Index. The contracts trade on ASX 24 and are cash settled against the relevant Bloomberg AusBond Index.

The contracts are intended for institutional investors and market participants seeking exchange-traded exposure to Australian bond and credit markets, including banks, asset managers, ETF issuers, superannuation funds, proprietary trading firms and market makers.

Source: ASX