Our annual bond portfolio review

Eureka Report's bond expert reviews the portfolio and it's time for some changes.

Summary: In the listed bond market, most securities pay floating rate coupons, which helps ensure capital stability. Risks include credit risk and subordination risk, but bonds should offer a better return than term deposits. For my model bond portfolio, the current yield’s spread over the Commonwealth government bond rate is virtually unchanged from inception a year ago.

Key take-out: The portfolio has put in a sound performance, but as two senior bonds are approaching maturity, there are advantages to substituting these for two other offerings.

Key beneficiaries: General investors. Category: Investment bonds.


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