Investing in Hybrids for Income
Hybrids are complex investment instruments. You just need to look at a 150-page prospectus for one to see this.
Introducing InvestSMART's Hybrid Income Portfolio
The advantage of InvestSMART's Hybrid Income Portfolio is our that the investment team at InvestSMART have hand-picked a collection for you to form a portfolio with the aim of providing investors with above market yield and lower volatility.
Hybrids are not without their risks. Our experts select the ones to hold, what price to hold them at and which ones to avoid to build a diversified portfolio. With most hybrids starting at $100 per share, investors may find diversification hard to come by while still holding a meaningful parcel.
Our portfolio of 10 – 20 hybrids starts at a minimum investment of $25,000 and gives you instant diversification and lowers risk by spreading your funds across a number of hybrids and not just one or two.
Watch the recording of our Q&A: Investing in Hybrids for Income, with InvestSMART's Head of Funds Management, Alastair Davidson as he answers members questions and the benefits it can offer to the income-focused investor.
Topics covered:
- 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.
Following the Q&A, we also received questions regarding our position in National Income Securities (NABHA). Read the article on the NABHA security.
Duration: 25:49 mins
Find out more about the InvestSMART Hybrid Income Portfolio.
Frequently Asked Questions about this Article…
Hybrid investment instruments are complex financial products that combine elements of both debt and equity. They can offer higher yields but come with their own set of risks and complexities.
The InvestSMART Hybrid Income Portfolio is a curated collection of hybrid investments selected by InvestSMART's experts. It aims to provide investors with above-market yields and lower volatility by diversifying across 10-20 different hybrids.
Diversification is crucial in hybrid investing because it spreads risk across multiple investments. This reduces the impact of any single hybrid's poor performance on your overall portfolio.
The minimum investment required for the InvestSMART Hybrid Income Portfolio is $25,000. This allows investors to achieve instant diversification across a range of hybrid securities.
Investing in hybrids involves risks such as market volatility, interest rate changes, and the potential for issuer default. It's important to understand these risks before investing.
You can learn more about the InvestSMART Hybrid Income Portfolio by watching the Q&A session with Alastair Davidson, Head of Funds Management at InvestSMART, or by reading the detailed article on their website.
The estimated annual income from the InvestSMART Hybrid Income Portfolio varies based on market conditions and the specific hybrids included in the portfolio. It's designed to provide above-market yields.
The National Income Securities (NABHA) is one of the hybrid securities discussed in the context of the InvestSMART Hybrid Income Portfolio. It highlights the importance of understanding individual securities within a diversified hybrid portfolio.
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