The HBRD ETF pays monthly income from a diversified mix of hybrid securities, subordinated bonds, senior bonds, and cash, offering flexibility to adjust allocations based on market conditions. It was traditionally a hybrid portfolio, but this has morphed into more traditional fixed income over time. We like this ETF, although we are not on an island with its market cap approaching $2.4bn – While it’s a shame that APRA has decided to phase out Hybrid securities, and this will have implications for this ETF between now and 2032, with HYBD likely to move increasingly into subordinated debt.
- Over the last 12-months, the ETF has delivered a 6.35% grossed-up yield, which is distributed monthly.
Coolabah Capital is the investment manager that chooses the portfolio mix, and they’ve done a solid job delivering a grossed-up return of 5.06% since its inception in late 2017, remembering that yields were very low during COVID. They charge an annual management fee of 0.55%.
- We like this solid-yielding conservative ETF for floating rate exposure to a mix of hybrid and fixed income securities. MM holds the HBRD ETF in its Core ETF Portfolio.
