Australians tend to have a lot of cash, property, and equities. There is not much in between. Hybrids, however, generally pay a healthy regular income on a quarterly basis at a substantial spread above the RBA cash rate. Currently, five-year major bank hybrids are paying about 5% pa, including franking.... Show More
In my column today I analyse why ScoMo really won, noting that "during the week I advised my investors, media colleagues and friends that it would not be surprising if Scott Morrison won the election comfortably". Click on that link to read the column or AFR subs can click here.... Show More
A big thanks for the incredible interest in our Complexity Premia podcast! Please note that this is nerdy investment content, and not for retail punters. In this episode we: discuss the huge credit rally that no experts expected at the end of 2018 (capitalising on this, our insto-only Active Composite... Show More
Today I argue that while Labor have given ScoMo a shot of winning the election with its shocking recent mis-steps and its bizarre tax-everything-that-moves-platform, the media coverage and political analysis has never been more biased in all likelihood because those inside the beltway fervently believe that ScoMo does not have... Show More
A few quick thoughts on recent credit spread movements in the Tier 2 subordinated bond and the Additional Tier 1 capital hybrid markets. First, the screenshot below shows the clean price of the most recently issued, 5 year major bank subordinated Tier 2 bond. The impact of APRA’s November 2018 consultation... Show More
A column in The Australian over the weekend argued that mums and dads should think about selling their fully franked bank Tier 1 hybrids to buy unfranked Tier 2 subordinated bonds. But this analysis is flawed on many bases, the most obvious of which is that the unfranked cash yields... Show More
In the AFR today I examine why the ASX hybrid market is once again booming and changes S&P announced this week to the way they are rating Aussie banks that could result in rating shifts for subordinated bonds and hybrids (click on that link to read for free or AFR... Show More
In my AFR column I analyse one of the most debated investments on the ASX: the $2 billion NAB raised in 1999 via its National Income Securities (ASX: NABHA) (click on that link to read via Twitter or direct AFR subscribers can click here): Show More
During the Italian crisis there were some big moves in credit spreads overseas, and I've been asked a few times how current ASX hybrid spreads/returns compare to the major banks' hybrids issued in US dollars. Enclosed is a quick summary. Show More
Two quick charts looking at the risk and return trade-off between ASX equities and ASX major bank hybrids. The first chart considers the current cash (unfranked) and fully franked dividend yield on the ASX200 index versus a range of major bank hybrid yields in both franked and unfranked terms. The... Show More
