ACBC adds two more XTB model portfolios


By Jerome Doraisamy

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The Australian Corporate Bond Company (ACBC) have launched two new exchange-traded bond unit (XTB) model portfolios in response to increased demand for expanded portfolio options.

The group said the two new portfolios, which would build on the two XTB model portfolios launched in July, would provide financial advisers and their clients with further opportunities to incorporate exposure to individual corporate bonds.

The new XTB model portfolios will be made available exclusively to advisers and will incorporate feedback from advisers for multiple portfolios that make corporate bond exposure simple.

The Concentrated High-Yield Model Portfolio, which will follow the philosophy of the High Yield Model Portfolio launched last month, would cater to investors with lower balances by offering a portfolio with a smaller number of XTBs, thereby lowering the portfolio cost, the company said.

The Cash Plus Model Portfolio, intended to be a tradable alternative to cash or short-term term deposit products, would deliver a significant pick-up on the yields of many three-month term deposits without the holding period of break fees, the company said.

It said Cash Plus would also include daily liquidity on the ASX so investors and savers could access their cash, and offer very reliable and attractive cash flow, as well as capital stability, making it appealing to self-managed superannuation funds or investors looking toward the pension phase.

ACBC co-founder and chief executive Richard Murphy said the new portfolios came at a time of increased interest in enhanced ways to manage the direct-investment fixed income component of adviser businesses.

“In the current low interest rate environment, advisers are being challenged by their clients to find efficient ways of delivering yield and income, but without price volatility, especially for those in or approaching retirement,” Murphy said.

“We will continue to provide advisers with access to a growing range of corporate bond solutions to meet these needs of their clients – with four model portfolios now available, advisers can choose one or a combination of models to suit their clients’ risk tolerance and financial objectives.”

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