Hub24 debuts novel fixed interest SMA

01-Apr-2016

By Sarah Kendell

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Research firm BondAdviser has launched a separately managed account (SMA) on the Hub24 platform designed to broaden advice clients’ exposure to different aspects of the fixed interest market.

The BondAdviser Income Plus Portfolio is the first SMA to include exchange traded bond units from the Australian Corporate Bond Company (ACBC), offering retail investors exposure to Australia’s corporate bond market.

The portfolio would also feature subordinated debt instruments, but would exclude hybrid securities to ensure better capital stability and lower volatility for the portfolio.

The investment benchmark is 1.5 per cent above the RBA cash rate, while management fees are set at 0.25 per cent.

BondAdviser head of research Nicholas Yaxley said the SMA would offer mainstream Australian wealth clients fixed income products previously available only to high net worth and institutional investors.

“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,” Yaxley said.

“With exposure to senior bonds, this product will offer higher returns than many cash products for only a small step up the risk spectrum.”

ACBC chief executive Richard Murphy said the portfolio would offer advice clients important access to the corporate bond market through the transparent vehicle of an SMA.

“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,” Murphy said.

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