Exchange-Traded Treasury Indexed Bonds (eTIBs) in Australia: 2025 Guide

For Australians looking to shield their portfolios from inflation and market volatility, exchange-traded treasury indexed bonds (eTIBs) have emerged as a standout option in 2025. With inflation still hovering above the Reserve Bank of Australia’s (RBA) 2–3% target range and interest rate uncertainty lingering, eTIBs are front of mind for both conservative and savvy investors. But what exactly are they, and should you consider adding them to your investment strategy this year?

How eTIBs Work: Linking Your Returns to Inflation

eTIBs are Australian government bonds traded on the ASX, where both the principal and interest payments are indexed to inflation (using the Consumer Price Index, or CPI). Here’s what sets them apart:

• Capital protection: The value of your investment rises in line with inflation, preserving your purchasing power.
• Regular income: Interest (coupons) is paid quarterly, and each payment is adjusted for inflation.
• Government guarantee: eTIBs are backed by the Commonwealth Government, making them one of the lowest-risk securities in the country.

For example, if you bought $10,000 worth of eTIBs in 2023 and inflation averaged 4% per year, your principal would be adjusted to $10,816 by 2025, with interest payments also rising accordingly.

2025 Market Conditions: Why eTIBs Are Back in Focus

After several years of unusually high inflation, the RBA’s 2025 outlook projects a gradual return toward target, but not without bumps along the way. This has prompted a renewed interest in inflation-protected investments:

• Inflation uncertainty: While inflation is expected to fall to around 3.2% by late 2025, global events and supply chain pressures could still trigger spikes.
• Interest rate volatility: The RBA has paused rate hikes for now, but economists remain divided on the timing of the next move.
• Share market jitters: Geopolitical tensions and tech sector volatility have pushed many Australians to consider defensive assets.

Against this backdrop, eTIBs provide a rare combination: government-backed safety and a built-in inflation hedge. In 2025, several new eTIB series have been issued, with yields ranging from 1.1% to 1.5% plus CPI, depending on maturity.

Who Should Consider eTIBs — And What Are the Risks?

eTIBs suit a particular type of investor, but they’re not a silver bullet. Here’s what to weigh up:

• Ideal for: Retirees, conservative investors, SMSFs, or anyone wanting to reduce inflation risk without sacrificing liquidity.
• Liquidity: eTIBs trade on the ASX, so they can be bought and sold easily — unlike traditional over-the-counter government bonds.
• Tax implications: Indexation increases the principal value, which is taxed as income, not capital gains — this can push up your tax bill compared to standard bonds.
• Interest rate risk: If market rates rise sharply, the price of existing eTIBs can fall, just like with any bond.
• Lower yields in low inflation: If inflation drops below expectations, your returns will be lower than with fixed-rate bonds or term deposits.

In 2025, the government has made it easier for retail investors to access eTIBs through most online brokers, and minimum investments have dropped to as low as $1,000 per parcel. Still, investors should pay close attention to the maturity date and the specific bond series, as yields and indexation mechanics differ.

How to Buy eTIBs on the ASX

Getting started with eTIBs is straightforward:

1. Choose your broker: Most major Australian online brokers (e.g., CommSec, Nabtrade, SelfWealth) offer eTIB trading.
2. Research the bond series: Look up codes like GSIXX (where XX refers to maturity year) on the ASX for detailed terms and yield information.
3. Place your order: You can buy and sell eTIBs like shares, with settlement in T+2 days.
4. Track your returns: Coupon payments are credited quarterly, and you’ll see your principal value adjust with CPI each year.

Some investors hold eTIBs until maturity for predictable, inflation-adjusted returns, while others trade them to take advantage of price moves if inflation expectations change.

Final Thoughts: Are eTIBs Right for Your Portfolio in 2025?

In a year where inflation remains unpredictable and economic signals are mixed, eTIBs offer Australians a compelling way to preserve wealth and generate inflation-proof income. They’re not the highest-yielding asset on the market, but the security and CPI linkage are hard to beat for risk-averse investors. As always, weigh your own goals and tax situation carefully — but don’t overlook eTIBs if you’re seeking stability in a shifting financial landscape.