Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Last week NBI dropped steeply to $1.75 despite the lack of any bad news. Could this be due to a perception that official interest rates will be increased thus lowering bond prices and hence the NTA? What factors influence the price of this fixed income product?
Sandy B
Hi Sandy,
Drops like that would normally be associated with a big widening of credit spreads due to an external market shock, i.e. the markets pricing of default risk. That wasn’t the case. Interest rates going higher are not a new thing for the market, and while they are a negative for fixed rate bonds , I doubt that would be the reason. The NTA on the fund sits around $1.96/97 and hasn’t changed much. It’s worthwhile keeping an eye on the daily NTA which is released to the ASX . I suspect someone has traded a reasonable parcel and not used a limit order, which has caused a spike lower in the price. NB. MM used to own NBI in the Income Portfolio however we sold out some time ago.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
