New ETF: FSUB, the fixed-rate SUBD.
In an Australian first, investors will be able to access a dedicated Australian Fixed-rate subordinated debt ETF.
Pre-register your interest via the form below.
FSUB offers investors a transparent, liquid portfolio of investment grade credit quality subordinated fixed rate bonds issued by leading banks and financial institutions.
When we launched the VanEck Australian Subordinated Debt ETF (SUBD) in 2019, Tier-2 debt was a growing market after APRA decided that the major banks would need to significantly increase the minimum loss-absorbing capital they hold. Interest in the Tier-2 subordinated debt market increased more recently when APRA called time on hybrids.
In the interest rate environment of 2019, most issuance was floating. As a result, the index SUBD tracked only included floating-rate notes. However, as the interest rate environment normalised, investor demand shifted toward fixed-rate issuance, prompting Australia’s big four banks to begin issuing fixed-rate subordinated debt in 2022. Since then, it has become common for banks to issue both fixed and floating-rate instruments, as shown in the chart below.
Chart 1: AUD Subordinated Debt Issuance by Calendar Year
Source: Bloomberg. As at 21 November 2025.
We think this is a potential opportunity for investors.
The FSUB opportunity
Investment grade subordinated bonds
This Australian first provides investors access to a portfolio of investment grade credit quality subordinated fixed rate bonds issued by leading banks and financial institutions. These securities sit within the regulated capital structure and qualify as Tier 2 Capital.
Diversification and defensive characteristics
Fixed rate subordinated bonds can provide valuable diversification benefits and defensive qualities.
Attractive yield premium
Subordinated bonds generally provide a yield premium relative to senior debt, commensurate with risk.
Published: 30 November 2025
VanEck Investments Limited ACN 146 596 116 AFSL 416755 (VanEck) is the responsible entity and issuer of VanEck Australian Fixed Rate Subordinated Debt ETF (FSUB). Units in FSUB are not currently available. FSUB has been registered by ASIC, and VanEck has lodged an application with ASX for units in the fund to be admitted to trading status on ASX. You should read the product disclosure statement (PDS) and target market determination (TMD), which will be available at vaneck.com.au, before considering whether or not any VanEck fund is appropriate for you. Investing in ETFs has risks, including possible loss of capital invested. No member of the VanEck group guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from any fund.
The iBoxx AUD Fixed Investment Grade Subordinated Debt Mid Price Index (“the Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and licensed for use by VanEck. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); ASX® is a trademark of ASX Operations Pty Limited and these trademarks have been licensed for use by SPDJI and sublicensed by VanEck. The VanEck Australian Fixed Rate Subordinated Debt ETF (Fund) is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, ASX or their respective affiliates and none of them makes any representation regarding the advisability of investing in the Fund. Such parties do not accept liability for any errors, omissions, or interruptions of the Index and do not give any assurance that the Fund will accurately track the performance of the index or provide positive investment returns. Inclusion of a security within the index or Fund is not a recommendation by any party to buy, sell, or hold such security. Read the PDS for the full index disclaimer.
FSUB is likely to be appropriate for a consumer who is seeking a regular income distribution, is intending to use the product as a minor or satellite allocation within a portfolio, has an investment timeframe of at least 3 years, and has a medium risk/return profile. show less
