InvestSMART Hybrid Income Portfolio - September 2018
- The InvestSMART Hybrid Income Portfolio produced a return of 2.10% (after fees) during the September Quarter
- Axsesstoday Bonds (AXLHA) & Westpac Capital Notes (WBCPD) were introduced during the quarter at around a 1.50% weighting each
- The estimated yield on the portfolio has remained steady at 5.50% (incl franking)
- Since inception the Hybrid Income portfolio has returned 4.75% per annum (after fees)
Macquarie Group Capital Notes 3 (MQGPC) & the CBA PERLS VII (CBAPD) were the strongest contributors to portfolio performance for the quarter at 0.21% each, while NAB Convertible Preference Shares II (NABPB) was the largest detractor at -0.01%.
During the period, one of the portfolio’s smaller holdings (< 1.5%) in the Hospitality and Transport lender Axcesstoday’s Simple Bond surprised the market by going into trading halt and then subsequently into voluntary suspension from the ASX, having appointed advisory firm Deloitte to conducts a strategic review of the business.
While the payment of AXLHA’s coupon was paid as scheduled on 5 October, the voluntary suspension shall remain in place for AXLHA until the 22nd of October 2018 at the latest.
The InvestSMART Hybrid Income Portfolio is designed to help diversify the risk and return outcome of a traditional Equities/Debt/Cash income orientated portfolio.Overall, the portfolio continues to perform as expected, trading in excess of our objective RBA Cash 3% since inception.
Frequently Asked Questions about this Article…
The InvestSMART Hybrid Income Portfolio is designed to diversify the risk and return outcomes of a traditional Equities/Debt/Cash income-oriented portfolio. It aims to provide a steady income stream with a focus on hybrid securities.
During the September 2018 quarter, the InvestSMART Hybrid Income Portfolio produced a return of 2.10% after fees. This performance is part of its ongoing strategy to exceed the RBA Cash rate of 3% since inception.
The estimated yield on the InvestSMART Hybrid Income Portfolio has remained steady at 5.50%, including franking credits. This yield reflects the portfolio's focus on providing a reliable income stream.
During the September 2018 quarter, Axsesstoday Bonds (AXLHA) and Westpac Capital Notes (WBCPD) were introduced to the portfolio, each with a weighting of around 1.50%.
The Macquarie Group Capital Notes 3 (MQGPC) and the CBA PERLS VII (CBAPD) were the strongest contributors to the portfolio's performance, each adding 0.21% to the overall return for the quarter.
One challenge was the trading halt and subsequent voluntary suspension of Axsesstoday’s Simple Bond from the ASX. Despite this, the coupon payment for AXLHA was made as scheduled on October 5th.
Since its inception, the InvestSMART Hybrid Income Portfolio has returned 4.75% per annum after fees, consistently trading above its objective of the RBA Cash rate of 3%.
For more detailed information about the InvestSMART Hybrid Income Portfolio, you can download the PDF available on the InvestSMART website.
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