An active approach to income producing equities, ETFs and listed Income Securities – Click here to view
A softer week for the Income Portfolio which fell -0.76%, cash sits at ~5%. The portfolio composition sits at ~65% equities & ~30% in income / fixed income securities which we see as the correct setting for now. If the market pulls back we are likely to reduce fixed income securities and increase our weighting to stocks. During the week there was very few noticeable performers in this portfolio on either side of the ledger.
The new ANZ Hybrid commenced trading earlier in the month and is now trading at $101.55 versus $100 issue price. The chart below looks at Major Bank Hybrids with the black bar being margin over bank bills and the orange bar being yield to first call date. Yield to first call is the measure that we use to think about yield in the hybrid space as it includes the difference between current market pricing and face value plus it includes the markets expectation of forward interest rates.
As it stands getting a yield to call of 4% in major bank hybrids is not achievable.
