Hybrids Model Portfolio

Highlights

  • A concentrated portfolio of hybrids (aka listed income securities).
  • Constructed utilising Lonsec’s issue risk assessment methodology and investor risk profiling.
  • Excellent long term track record of delivering high gross income yields.
5yr performance graph

What is it?

The Hybrids Model Portfolio is our portfolio for SMSF investors that wish to invest in a selection of hybrids and corporate debt securities listed on the ASX. It has a long term track record of delivering high gross income yields.

Portfolio Objective

The objective of the portfolio is to deliver a sustainable income stream well in excess of either cash and inflation, while maintaining capital stability over the medium to long term. The portfolio is suitable for investors seeking a relatively high level of capital security from a diversified portfolio of listed hybrids and debt securities, with returns that should exceed those available from cash and other forms of short-term income investments.

Portfolio strategy

Listed Income securities such as hybrids, corporate bonds, floating rate notes, etc. provide exposure to a sustainable and defined income stream, usually greater than cash and inflation, in addition to a relatively high level of capital security through a predetermined maturity/redemption date.

The portfolio has been constructed utilising Lonsec’s issue risk assessment methodology and investor risk profiling. To determine the specific risks of an issue, Lonsec examines the financial position and investment risks related to each security. The six main risk categories identified and assessed include: Financial strength of the issuer, the Structure and Maturity of the issue, Liquidity and Volatility on the secondary market and the risks associated with the Industry in which the issuer operates.

The industry risk of the portfolio is reduced through exposure to four different industries. Lonsec has examined the maturity structure of the portfolio constituents and expects redemption to occur on the specified call dates for each security.

Total Returns1yr%3yr %pa5yr %pa7yr %pa
Hybrids Model1.132.973.834.08
Bloomberg AusBond Bank Bill Index0.040.461.021.33
As at 31/03/2022
Note this performance is updated quarterly
Past performance is not a reliable indicator of future performance. Performance does not include franking credits, or other taxes or possible transaction costs . Performance is notional in nature and the actual performance of individual portfolios may differ to the performance of the Model.

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