Interest Rates

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Interest rate investments can provide you with a regular income stream, diversification and portfolio stabilisation. Alternativeley ASX Interest Rate futures and options contracts allow you to gain exposure to short and long-term Australian and New Zealand interest rates.

 

 

Interest Rate Securities

Interest rate securities are a form of capital raised by business entities and governments, which borrow from you – the investor. Debt is raised by an entity to assist in running its operations. In the case of a company, a debt raising usually forms part of the company’s balance sheet capital to underpin the running and operation of its business.

While there are a variety of types of debt raisings listed on ASX, all relate to raisings or ‘issues’ undertaken by business entities (such as ASX listed companies) to contribute to their capital requirements. When referring to debt listings on ASX, the term ‘Interest Rate Securities’ (IRS) is used to describe this group of listed investments.

There are a variety of reasons investors may chose to invest in Interest Rate Securities, including the potential to :

  • receive a steady and defined income stream. All Interest Rate Securities pay you income. Your income may be paid once, twice or four times a year;
  • improve the return on your capital typically held as cash. Income from Interest Rate Securities is typically higher than interest paid on bank deposits;
  • decrease the risk of your overall portfolio; and
  • profit from expected movements in interest rates.

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Exchange-traded Australian Government Bonds

Retail investors are able to buy and sell Exchange-traded Australian Government Bonds ("AGBs") as easily as they can buy and sell shares. The market for Exchange-traded Australian Government Bonds, or simply “Exchange-traded AGBs”, sits alongside other ASX quoted securities and facilitates retail investor access, both domestically and globally through ASX’s broker distribution network.

More about Exchange-traded Australian Government Bonds

 

Interest Rate Futures and Options

 

ASX offers futures and options over a diverse range of Australian and New Zealand interest rate securities and market indicators.   

The ASX interest rate futures and options market is the largest and most actively traded fixed income derivatives market in the Asia-Pacific region.

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