Leading fixed interest research and analysis firm BondAdviser today announced the launch of a new fixed income managed portfolio that will feature XTBs (Exchange Traded Bond units), providing financial advisers and their clients with greater exposure to the benefits of corporate bonds.
The BondAdviser Income Plus Portfolio, now available on HUB24, is designed to give investors an alternative to term deposits, while maintaining capital stability, regular income and consistent returns.
This is the first managed portfolio available to advisers to include XTBs on an SMA platform. The managed portfolio’s investment universe includes both corporate bonds, through XTBs, and Subordinated Debt. By including XTBs within the managed portfolio, this will give advisers the ability to offer their clients exposure to the returns of corporate bonds on ASX – an investment previously limited to institutional and wholesale investors.
The portfolio explicitly excludes hybrids to ensure the managed portfolio delivers regular income, along with capital stability and low portfolio volatility.
With most fixed interest managed portfolios the exclusive domain of private wealth management groups, BondAdviser Head of Research Nicholas Yaxley said he was pleased to be bringing a new fixed income solution to all independent advisers.
“In today’s low-interest rate environment, many retail investors are looking for an alternative to low-yielding term deposits for the fixed income component of their portfolio. With exposure to senior bonds, this product will offer higher returns than many cash products for only a small step up the risk spectrum.”
Richard Murphy, CEO and Co-Founder of Australian Corporate Bond Company (ACBC), which brought XTBs to market, said corporate bonds had a powerful role to play in providing better fixed income solutions to advisers and their clients.
“We are pleased to see XTBs feature as a key component of this portfolio as they provide an innovative and transparent way for investors to access the returns from corporate bonds from leading ASX listed companies. The Income Plus Portfolio is likely to be an attractive solution for advisers and investors looking for income, but also with a focus on capital stability.”
Andrew Alcock, Managing Director of HUB24, said: “As the most functional managed portfolio and SMA platform in the market, we’re proud to be partnering with BondAdviser and ACBC to be the first to bring this product to market. It’s great to see new investment solutions bringing more choice to independently- minded advisers and their clients.”
The BondAdviser Income Plus Portfolio has an investment benchmark of the RBA cash rate plus 1.5 per cent and an Investment Management Fee of 0.25% p.a. (inc GST).