The introduction of two new XTB (Exchange Traded Bond units) model portfolios is set to provide financial advisers and their clients with a simple way to incorporate exposure to individual corporate bonds.
Launched today and available exclusively through advisers, the industry-first XTB-only model portfolios create a cost-effective, efficient way for advisers to manage the direct investment fixed income component of their business.
The High Yield Model Portfolio is quantitative-based with qualitative overlay and consists of at least eight XTBs. The Maturity Ladder Model Portfolio aims to provide return of capital from maturing XTBs on an annual basis and consists of at least five XTBs. Advisers can select one or a combination of both portfolios, to best suit their clients’ needs.
ACBC co-founder and CEO Richard Murphy said the new portfolios cater for the growing appetite for more defensive investments, particularly corporate bonds.
“Our XTB model portfolios have been developed in direct response to growing demand from advisers. Offering lower volatility than equities and hybrids and a higher return than cash and TD investments, our model portfolios make it easier for advisers to build corporate bond portfolios for clients,” Mr Murphy said.
“Extraordinary market conditions are driving a growing need for higher-yielding, low volatility products, which makes the launch of our model portfolios especially timely.
“These new model portfolios should resonate with clients looking for a transparent and stable fixed income portfolio that offers regular and predictable income streams.”
XTBs are an ASX-traded product that give investors direct exposure to returns from corporate bonds over leading ASX listed companies within the ASX100, such as BHP, NAB and Telstra. Since launching in May 2015, approximately $70 million worth of XTBs have now traded.