Video: Investing in Hybrids for Income
Do you hold just one or two of the bank hybrids? There is a common misconception among people that using hybrid investments is a safer alternative to cash, but hybrids are not without risk. A diversified approach could be a better option.
InvestSMART have launched a diversified model portfolio of hybrids, comprised of ASX listed debt and preference securities. The aim for this model portfolio is to achieve a return 3% above the RBA cash rate.
Join Head of Portfolio Services and Analyst, Mitchell Sneddon, and Head of Funds Management, Alastair Davidson, as they talk about our new portfolio, which hybrids made the cut, and answer your questions.
Topics covered include:
· Estimated annual income and how you can receive it
· The difference between hybrid structures
· Why diversification in hybrids is important
· The risks associated with hybrids
· And have your questions answered
Want to know more?
Find out more about InvestSMART's new Hybrid Portfolio.
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Frequently Asked Questions about this Article…
Hybrid investments are financial instruments that combine elements of both debt and equity. Unlike cash, which is considered low-risk, hybrids carry certain risks and are not a direct substitute for cash. They can offer higher returns but also come with increased risk.
Diversification is crucial in hybrid investments to spread risk across different securities. Holding a diversified portfolio of hybrids can help mitigate the risks associated with individual securities and provide more stable returns.
InvestSMART's Hybrid Portfolio is a diversified model portfolio comprised of ASX-listed debt and preference securities. The portfolio aims to achieve a return that is 3% above the RBA cash rate, providing investors with a potentially higher income.
The key people behind InvestSMART's Hybrid Portfolio are Mitchell Sneddon, Head of Portfolio Services and Analyst, and Alastair Davidson, Head of Funds Management. They provide insights and answer questions about the portfolio.
Investing in hybrids involves risks such as credit risk, interest rate risk, and market volatility. It's important for investors to understand these risks and consider them when making investment decisions.
The estimated annual income from hybrid investments can be received through regular distributions, which are typically paid out by the issuing companies. The specific details on how income is distributed can vary based on the structure of the hybrid.
InvestSMART's discussion on hybrid investments covers topics such as estimated annual income, the difference between hybrid structures, the importance of diversification, and the risks associated with hybrids.
You can find more information about InvestSMART's new Hybrid Portfolio by visiting their website or checking out their live blog titled 'Investing in Hybrids for Income'.
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