Should you consider building a hybrid?

The price of bank hybrids has risen, but you can make your own.

Summary: The market prices of bank hybrids have been on the rise, and that’s been eroding yields. To recapture higher yields, investors do have alternatives. But higher returns generally do bring higher risk.

Key take-out: A blend of a bank term deposit with bank shares effectively creates an alternative hybrid, but a disadvantage is that the value of a synthetic hybrid is likely to be more volatile over time.

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