Exchange-Traded Treasury Bonds (eTB): A 2025 Guide for Australian Investors

For years, investing in Australian Government bonds was the preserve of institutional investors and high-net-worth individuals. That’s rapidly changing. With the rise of exchange-traded treasury bonds (eTBs), everyday Aussies can now access government debt as easily as buying shares—opening up a world of defensive investing and stable income. But are eTBs right for your portfolio in 2025? Here’s what you need to know.

What Are Exchange-Traded Treasury Bonds (eTBs)?

eTBs are Australian Government bonds listed and traded on the ASX, mirroring the underlying treasury bonds issued by the Commonwealth. This means you can buy and sell eTBs just like shares—using your existing brokerage account, with clear pricing, transparency, and settlement.

• Denomination: Traded in parcels as low as $100, making them accessible for retail investors.
• Income: eTBs pay fixed or floating interest (coupons) every six months, with principal repaid at maturity.
• Security: Backed by the full faith and credit of the Australian Government, making them one of the lowest-risk investments available.

For example, an eTB with a face value of $100, maturing in 2030 and offering a 4.25% coupon, would pay $2.125 every six months per bond until maturity, when you receive the $100 back—unless you choose to sell on the ASX before then.

2025 Policy Updates and Market Trends

The eTB market has seen notable policy tweaks and regulatory attention in 2025. The Australian Office of Financial Management (AOFM) increased the range of eTB maturities in response to investor demand for diversified duration options, including new issues extending beyond 15 years. This expansion aims to give investors more flexibility for matching their cash flow or liability needs.

Other key developments this year include:

• Liquidity enhancements: The ASX has partnered with major market makers to ensure tighter bid-ask spreads, improving trade execution for retail investors.
• Tax reporting simplification: The ATO introduced digital reporting for eTB coupon income, making tax time easier for individuals and SMSFs.
• ESG demand: 2025’s focus on sustainable finance has sparked interest in Australian Government Green Bonds, also offered as eTBs, targeting investors with ethical mandates.

These changes make eTBs more attractive, especially as investors look for defensive assets in a year marked by global volatility and persistent inflation.

How eTBs Fit into a Modern Investment Portfolio

With cash rates hovering around 4.10% and equity markets swinging on global news, eTBs offer a unique blend of stability and tradability. Here’s how savvy Australians are using them in 2025:

• Income generation: Retirees and income-seekers are using eTBs for predictable, government-guaranteed cash flows.
• Portfolio diversification: eTBs move differently to shares and property, helping to cushion against market downturns.
• Liquidity management: Unlike traditional bonds, eTBs can be sold on the ASX at any time, providing an exit if your needs change.

For instance, a self-managed super fund (SMSF) might allocate 15% to eTBs for capital preservation, while a young investor could use eTBs as a ‘safe core’ and take more risk with the rest of their portfolio.

Risks and Considerations for 2025

No investment is without risk. eTBs are sensitive to interest rate changes—if rates rise, the price of existing eTBs may fall. Selling before maturity could lock in a loss if market prices are below your purchase price. Liquidity, while improved, can still be thin for some maturities or during market stress.

Other points to weigh:

• Reinvestment risk: When eTBs mature or you receive coupons, you may need to reinvest at lower rates if yields have fallen.
• Taxation: Coupon income is taxable, and capital gains may apply if you sell above your purchase price.
• Market risk: While credit risk is negligible, the market value of eTBs fluctuates with economic conditions and RBA policy.

Despite these risks, eTBs remain a standout option for conservative investors seeking transparency, access, and government-grade security.

Getting Started with eTBs

Ready to try eTBs? You’ll need a standard ASX brokerage account. Look up the eTB codes (e.g., GSBE47 for a 2033 maturity), check the live prices, and place your order as you would for shares. Minimum investments start at just $100, though brokerage fees apply. ASX and AOFM regularly publish lists of available eTBs, so it pays to shop around for the maturity and yield that best suit your goals.

For investors seeking a defensive, transparent, and accessible way to tap into the government bond market, eTBs are a tool worth exploring in 2025.