InvestSMART Hybrid Income Portfolio
|
Security |
Prev Weight |
New Weight |
|
MQGPB |
4.9% |
3.5% |
|
NABPB |
6.4% |
5.2% |
|
WPCPG |
7.2% |
9.6% |
We’ve trimmed our position in MQGPB. With no distributions due until March 2018, we feel spreads are tight when compared to the major banks.
We’ve also trimmed our position in NABPB. With 1.3 years to maturity, the spread is too tight when compared to other securities with longer maturities.
We’ve reinvested the proceeds of the above into WBCPG as it goes ex dividend on the 21st December and is priced favourably against other major bank hybrids.
Frequently Asked Questions about this Article…
The InvestSMART Hybrid Income Portfolio recently adjusted its holdings by reducing positions in MQGPB and NABPB, and increasing its investment in WBCPG.
InvestSMART reduced its position in MQGPB because there are no distributions due until March 2018, and the spreads are considered tight compared to major banks.
The NABPB position was trimmed due to its 1.3 years to maturity, with spreads deemed too tight compared to other securities with longer maturities.
InvestSMART increased its investment in WBCPG because it is going ex-dividend on December 21st and is priced favorably against other major bank hybrids.
When WBCPG goes ex-dividend, it means that new buyers of the security will not receive the upcoming dividend payment, which can affect its pricing and attractiveness.
The maturity of a security can affect its spread, as securities with longer maturities often have wider spreads compared to those with shorter maturities, impacting investment decisions.
Spreads in hybrid securities refer to the difference between the yield of the security and a benchmark rate, which can indicate the relative value and risk of the investment.
Comparing spreads among different securities is important because it helps investors assess the relative value and potential returns, guiding informed investment decisions.
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