Western Asset Enhanced Income Fund – Active ETF (FEIF) — Review & Analysis

FEIF is a newly listed active ETF from Franklin Templeton, launched on the ASX on 10 June 2026. It targets returns of 1.5-2% p.a. above the Bloomberg AusBond Bank Bill Index over rolling 3-year periods — meaning it aims to beat cash by a meaningful margin while keeping duration risk short. Management is handled by Western Asset Management, the same team behind the long-running Western Asset Enhanced Income managed fund. Both Lonsec and Zenith have Recommended ratings on the underlying strategy. See the Bond & Fixed Income category for the full list of alternatives, and run FEIF alongside similar funds using the Compare tool.

The fund holds around 430 fixed income securities across Australian and global credit markets — roughly 75% corporate bonds, 19% securitised debt, and 5% cash and equivalents. Geographic exposure is heavily weighted to Australia (~71%) with a meaningful European allocation (~22%). Non-AUD holdings are hedged back to AUD at 95-105%, so this is not a currency-return play — it's a pure credit and short-duration income strategy.

Where FEIF differs from a passive alternative like VAF or IAF is in its active credit selection. The team blends top-down macro views with bottom-up security-level analysis to lean into corporate and securitised debt when the risk-reward looks favourable, and pull back when it doesn't. The underlying Enhanced Income Fund returned +6.12% over 1 year and +7.54% p.a. over 3 years (net of fees) to 30 April 2026, versus the benchmark's +3.79% and +4.16% respectively — a genuine track record before the fund existed as an ETF.

For investors looking for income above the cash rate without significant interest-rate sensitivity, FEIF fills a specific gap between pure cash ETFs like AAA and duration-heavy bond funds like VAF. See our full bond ETF guide for how active credit funds fit into a diversified portfolio.