Due to their attractive income levels, franking credits and relative capital stability, hybrids have, for many years, been a popular investment option for Australian investors.
Hybrids are a unique type of investment, combining features of both bonds and shares. Investors are often attracted to hybrids because they typically offer lower risks than shares as well as higher income levels than bonds and cash.
While hybrids are an attractive investment in many ways, many investors may not really appreciate they come with risks and complexity. While individual hybrids may seem the same, they can be quite different in terms of their key features.
A failure to properly understand each hybrid security’s specific makeup can result in taking on unintended risks, and possibly ending up with unfavourable investment results.
BetaShares’ HBRD, overseen by one of Australia’s most experienced investment managers in this asset class, provides a convenient alternative to direct ownership of hybrids.
Why consider HBRD as part of your investment portfolio?
BetaShares Active Australian Hybrids Fund (managed fund) – ASX: HBRD provides exposure to a diversified portfolio of hybrid securities that provides regular, attractive tax-efficient income. HBRD can be used as a complement to or substitute for holding hybrids directly, offering greater portfolio diversification and risk management via a professionally managed solution.
HBRD is the only Active ETF in Australia to provide this exposure, and is available to buy and sell on the ASX, as you would a share.
Advantages of HBRD
Instant exposure to a professionally managed portfolio of hybrid securities
HBRD provides access to an actively managed portfolio of hybrids and seeks to reduce the volatility and potential downside risk that may be experienced by direct holders of hybrids.
Manage risk in your portfolio
If, and when, the hybrids market is assessed to be overvalued, or to present a heightened risk of capital loss, the Fund can allocate more of its portfolio to lower risk securities, or even move entirely into cash.
Attractive income, paid monthly
HBRD will pay monthly distributions and investors will be entitled to franking credits that the Fund’s investment portfolio generates. Income levels expected to be significantly higher than cash and senior bonds.
How to invest
As with all BetaShares’ funds, HBRD can be bought or sold on the ASX, just like you’d buy or sell a share.