Sectors: Hybrids
Is MM planning on holding the Bank Hybrids you have in the Income Portfolio to the redemption date? I have several Bank Hybrids in my super and my stockbroker is suggesting I should consider selling them while they are above par and put the money into other fixed interest assets like corporate bonds. When and where will you move your Bank Hybrid money to?
Hi,
Question for Saturday…..Is CGFPD hybrid included in APRA’s removal of bank hybrids. Also be interested on your comments on other non bank hybrids.
Thanks for your frank & fearless approach to advice over many years,
Regards
Craig
In your view, how do Fixed Coupon Notes rank when looking for income with downside risk no greater than say a Bank Hybrid. Coupon rates of 9% to 10% linked to a basket of Australian major banks (CBA, ANZ, NAB, WBC, MQG) are available, with 2 or 3 year duration and with a downside barrier set at 40%. Sounds comfortable, unless I have missed something.
In your opinion what is the best bank hybrids currently around at the moment for yield
Hi MM,
Yesterday’s rate rise in Australia has provided an immediate tailwind for floating-rate hybrids, with cash distributions stepping higher as the bank bill swap rate resets. For income-focused investors, that’s the good news. The less comfortable reality is that hybrid margins remain tight by historical standards, meaning total returns are being driven more by higher base rates than by generous risk compensation.
Hi James,
I hope the break was refreshing.
As Bank Hybrids are being phased out, what is MM’s preferred alternative investment for the future for retirees? I can see no comparable direct alternative.
Hi Shawn
Three brief questions in 1 if I may .
1. TWE wondering whether you could comment on the thought that TWE should be advantaged going forward by Trumps tariffs especially as they have a US domestic arm and Australian products will have a significant tariff advantage over other imports esp. European, -will this in your opinion lead to an improved performance in TWE from here?
2. Lynas are shooting the lights out at the moment; would this be a situation of “sell the strength” approach that you have been advocating for other stocks or better to enjoy the ride at this point ?
3. Following the maxim that there are no dumb questions – can you please clarify that when reading the hybrid chart that the score of “trading margin versus fair margin” should be interpreted as; the higher the figure ie .52% the lower the relative attractiveness of the value and vice versa- and would this be (all other things being equal ie: length of time to maturity and security of the backing company etc) be the main consideration when deciding in relative terms which one to purchase ?
(In other words ..how to interpret these figures provided)
Many thanks as always for your excellent product.
Don
Hi,
With the forthcoming demise of bank hybrid securities and your recent mention of Dominion I saw today an advertisement for Macquarie’s recently released ETF – Macquarie Global Yield Maximiser Active ETF – MQYM. I guess we are going to get more and more of these types of investments and whilst I have read the flyer, the PDS etc I am not that confident in the product. Welcome your thoughts and also going forward what might be the main attributes of alternatives to bank hybrids to look out for. Kind regards Geoff
