Reflecting the continued search for income in a low-yield environment by investors, in particular SMSFs, ‘XTBs’ have recently been added to OwnersAdvisory by Macquarie.

The OwnersAdvisory platform offers custom advice across all standard asset classes; cash, fixed income, equities, commodities and alternatives, based on an investor’s personal profile, objectives and risk appetite. The inclusion of XTBs on the digital wealth management platform expands the range of fixed income solutions that OwnersAdvisory advises on.

Founder of OwnersAdvisory and Macquarie Banking and Financial Services Group CIO John O’Connell said the two innovative solutions would complement each other, providing customised fixed income solutions to suit every portfolio.

“With Term Deposit rates tracking interest rates down to all-time lows and continued equity market volatility, we’re seeing a growing demand for higher-yielding fixed-income investments, particularly from those close to, or in retirement. Corporate bonds are worth consideration when investors are looking to rebalance their portfolios.”

“In particular, XTBs provide an innovative way for retail investors to gain exposure to the Australian corporate bond market. Often these bonds provide a better yield relative to their risk,” Mr. O’Connell said.

Each of the 48 XTBs on ASX provides access to the returns of an individual senior corporate bond, with a low minimum investment amount.

XTB co-founder and CEO Richard Murphy said access to corporate bond returns was important for OwnersAdvisory’s users to build a diversified investment portfolio across all asset classes. XTBs make that access easier for digital platforms such as OwnersAdvisory, because XTBs are on the digital grid by virtue of being on ASX.

“Bonds are a very important asset class because they reduce portfolio risk. But they need to be available on platforms and other digital technology hubs like ASX for them to make sense for many businesses like OwnersAdvisory and their clients.

Bond funds and ETFs are also on platforms. But funds are perpetual therefore investors lose the most critical economic feature of bonds – repayment of capital at maturity. This is a key driver of the capital stability and predictability of returns individual bonds provide. As bonds and XTBs mature, the outcome of your investment is known at the outset, which is great for retirees.

“We will be working closely with OwnersAdvisory to help further educate investors about the role of corporate bonds within a well-balanced and diversified portfolio,” Mr. Murphy said.

Source: Australian Corporate Bond Company (ACBC) / Owners Advisory by Macquarie

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