InvestSMART's Hybrid Income Portfolio: March Quarter Review 2021

The portfolio returned 1.8% for the quarter including franking credits. The estimated running yield is approximately 4.75%, and estimated yield to call/maturity is 4.25%, including franking credits
By · 14 Apr 2021
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14 Apr 2021 · 5 min read
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  • The total portfolio return was 13.2% for the 12-months including franking credits. Since inception the total portfolio return is 4.5% including franking credits, which is 0.45% above its return objective of the RBA Cash rate plus 3%. 

  • Last month trading yields on most hybrids fell, reflecting strong demand for yield by investors. 

  • The new Commonwealth Bank PERLS XIII hybrid (SX Code: CBAPJ) listed early April at with margin of 2.75% above BBSW including franking and 5.5 years to call. It is currently trading around issue price of $100. 

  • Two new hybrid deals were announced in the quarter. Macquarie Group announced raised $500 million in funds via Macquarie Capital Note 5 (MQGPE). Commonwealth Bank issued CBA PERLS XIII (CBAPJ), raised $1 billion with the margin set at 2.75% per annum. 

  • The portfolio reinvested the proceeds of the redemption of the NABHA security into existing holdings in the portfolio. 

  • At 31 March 2021 the portfolio had a 2.9% allocation to cash.


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Alastair Davidson
Alastair Davidson
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