Seed Funds Management has launched its first actively managed Exchange Traded Fund (Active ETF), the Seed Financial Income Fund Active ETF (ASX:SFIF).
This new ASX-quoted unit class provides investors with a dynamic and accessible way
to invest in the Financial Income Fund (FIF), which recently celebrated its 10-year
anniversary.
Strategy Overview
The Financial Income Fund (FIF) long track record of strong performance, offering an
actively managed portfolio of fixed income securities issued by entities regulated by
the Australian Prudential Regulation Authority (APRA).
These include:
- Hybrids (Additional Tier 1)
- Subordinated Bonds (Tier 2)
- Senior Debt
The Fund’s objective is to outperform the Solactive Australian Hybrid Securities Index,
while maintaining meaningful exposure to lower-risk financial instruments, primarily
issued by APRA-regulated banks.
Since inception in September 2015, as at 30 September 2025 the Strategy has
delivered:
- Net return of 6.45% p.a.
- Outperformance of 1.63% p.a. over the hybrid benchmark
- Achieved during a period when average interest rates were just 1.95% p.a.
Investment Opportunity
Following APRA’s announcement on 9 December, 2024 to phase out AT1 as eligible bank
capital by 2032, the hybrid market is expected to shrink, making access more difficult
for investors. This shift opens up greater opportunities in Tier 2 capital, traditionally a
wholesale-only market.
SFIF offers an opportunity for investors seeking continued exposure to Australian bank
capital:
- Proven Performance: FIF has consistently outperformed the hybrid index after
fees - Expert Management: Led by Nicholas Chaplin, a 35-year veteran who has
overseen over $200 billion in issuance and was involved in PEARLS I. - High-Quality Holdings: 75% of the portfolio is invested in Tier 2 and senior debt
- Market Growth Potential: Anticipated expansion in subordinated debt issuance
- Simplified Access: One fund, listed on the ASX, accessible to retail investors.
Seed Funds Management said it is proud to offer a fund that combines deep market expertise with a disciplined investment approach. With a modest level of FUM and a focus on quality, SFM believes the SFIF represents a rare opportunity to invest in a high-performing strategy managed by true industry specialists.
Performance Snapshot as at 30 September, 2025.
- 1.63% p.a. excess net returns over the Solactive Hybrid Index
- 4.50% p.a. excess net returns over the RBA cash rate“The launch of SFIF on the ASX marks a significant milestone for Seed Funds
Management. It allows investors to access our proven Financial Income Fund strategy
through the convenience and transparency of an exchange-traded structure—without
compromising on quality or performance,” said Nicholas Chaplin, Director and Senior Portfolio Manager, Seed Funds Management.
