InvestSMART Hybrid Portfolio Update

We've made some changes to the Hybrid Income Portfolio

We are removing the ANZ Bank Capital Note III’s (ANZPF) from the portfolio as it is now screening as expensive and increasing our position in the CBA PERLS VII Capital Notes (CBAPD). We see CBAPD as relatively attractive given similar duration.

 

Security

Last Price

Payment Freq

Franking

First Call Date

Yield to Call

ANZPF

$102.30

Semi-Annual

100%

23-Mar-23

5.79%

CBAPD

$97.80

Quarterly

100%

12-Dec-22

6.03%

Figure 1: Key Metrics, ANZPF vs CBAPD

 

We had been holding National Australia Bank Income Securities (NABHA) at 7.00% with the assumption that there would be an on-market buyback in the near future.  However, given recent lesser expectation of this occurring and a relatively low running yield of around 3.8%, we are choosing to de-weight the position.

 

We are reinvesting the proceeds from this into the National Australia Bank Capital Note (NABPC) as we feel it provides attractive short dated exposure. It is trading on a running yield of around 5.10% with a first call back date in March 2020.

 

Security

New Weight

Previous Weight

ANZPF

0.00%

1.20%

CBAPD

8.50%

6.90%

NABHA

5.00%

7.00%

NABPC

8.50%

6.30%

Figure 2: Hybrid Income Model changes

 

You should see these changes reflected in your portfolio over the next few days.

 

If you want more information about our Hybrid Income Portfolio, click here.


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