InvestSMART Hybrid Income Portfolio

InvestSmart trimmed its position in IAGPD because these securities are expensive compared to major bank hybrids. The plan is to gradually reduce this position to zero due to liquidity considerations.

SUNPG was removed from the portfolio because it is relatively expensive, and InvestSmart only received a small position in the offer. Therefore, it was decided to eliminate it from the portfolio.

The recent changes in the portfolio, including trimming positions in IAGPD and SUNPG, will increase cash holdings by approximately 2.3%. This decision aligns with the strategy to maintain a higher cash balance amid strong performance and market volatility.

InvestSmart is content with holding a higher cash balance due to recent strong performance and increased volatility in equity and credit markets, suggesting a cautious approach to current market conditions.

InvestSmart intends to participate in Westpac's reinvestment offer to roll WBCPC into a new capital note, which is part of their strategy to manage the portfolio effectively amid changing market conditions.

Liquidity is a significant factor in InvestSmart's investment decisions. For instance, the decision to reduce the position in IAGPD towards zero is partly due to liquidity considerations.

Holding a higher cash balance provides flexibility and security, especially during times of market volatility. It allows InvestSmart to take advantage of new opportunities and manage risks more effectively.

Comparing hybrid securities to major bank hybrids helps in assessing their relative value and cost. This comparison was a key reason for trimming the position in IAGPD, as it was found to be expensive compared to major bank hybrids.