Investing

Starter Packs – Overview and Parameters

The following are the rules and maintenance criteria for XTB Starter Packs.

High Yield rules and maintenance criteria
Cash Plus rules and maintenance criteria
Top Brands rules and maintenance criteria

XTB High Yield Model Portfolio
High Yield Starter Pack

Portfolio Manager

Australian Corporate Bond Company

Investment Strategy and Approach

To ensure the best opportunity to meet the starter pack’s objectives, ACBC selects a portfolio of XTBs using a 2-stage quantitative process, with a qualitative overlay.

Quantitative process

Stage 1: Selection

Define the investment universe of securities using the following criteria:

  • Rank from highest yield to maturity
  • Investment grade credit only¹
  • Weighting parameters (issuer, security², sector²)
  • Available liquidity

¹ At the time of investment decision
² As defined by GICS Sub Industry 

Stage 2: Application

Apply a set of rules to select an optimal High Yield starter pack.

Qualitative overlay

Adjustments may be made to the starter pack. These adjustments may be made to reflect market conditions, despite the rules being satisfied.

The general approach is to hold securities to maturity.  However, changes may be made in response to an improvement to the starter pack, by switching securities.

Parameters

PARAMETERS
Investment Universe/Authorised investments Available XTBs, fixed or floating
Target number of securities 5
Minimum security rating Individual bonds must be Investment Grade at the time of inclusion within the starter pack
Maximum individual issuer exposure 20%
Maximum individual security weighting² 20%
Maximum individual sector weighting² 20%
Capital structure parameters
  • 100% exposure to senior corporate bonds
  • 0% exposure to hybrids
Benchmark RBA cash rate
Liquidity All XTBs must have sufficient observable liquidity
Start Date 14 July 2016

² As defined by GICS Sub Industry

Maintenance of the portfolio

  • The portfolio will be reviewed monthly on the second Wednesday of each month
  • All changes in the portfolio will be made in expectation of the bid and offer of the XTB on ASX
  • Only switch an XTB (sell an XTB and buy a new XTB), if it increases the YTM by 5% (as a percentage of the rate)

More about this Starter Pack


Cash PlusCash Plus Starter Pack

Portfolio Manager

Australian Corporate Bond Company

Investment Strategy and Approach

To ensure the best opportunity to meet the starter pack’s objectives, ACBC selects a portfolio of XTBs using a 2-stage quantitative process, with a qualitative overlay.

Quantitative process

Stage 1: Selection

Define the investment universe of securities using the following criteria:

  • Select Floating Rate XTBs only
  • Rank from highest Trading Margin
  • Identify the income payment dates (monthly)
  • Investment grade credit only¹
  • Available liquidity

¹ At the time of investment decision

 Stage 2: Application

Apply a set of rules to select an optimal Cash Plus Starter Pack.

Qualitative overlay

Adjustments may be made to the Starter Pack. These adjustments may be made to reflect market conditions, despite the rules being satisfied.

The general approach is to hold securities to maturity.  However, changes may be made in response to an improvement to the Starter Pack, by switching securities.

Parameters

PARAMETERS
Investment Universe/Authorised investments Available Floating Rate XTBs
Target number of securities 3
Minimum security rating Individual bonds must be Investment Grade at the time of inclusion within the starter pack
Maximum individual issuer exposure 35%
Maximum individual security weighting² 20%
Capital structure parameters
  • 100% exposure to senior corporate bonds
  • 0% exposure to hybrids
Benchmark RBA cash rate
Liquidity All XTBs must have sufficient observable liquidity
Start Date 14 July 2016

Maintenance of the portfolio

  • The portfolio will be reviewed monthly on the second Wednesday of each month
  • All changes in the portfolio will be made in expectation of the bid and offer of the XTB on ASX
  • Only switch an XTB (sell an XTB and buy a new XTB), if it increases the Trading Margin by 5% (a percentage of the rate)

More about this Starter Pack


XTB Top Brands Starter PackTop Brands Starter Pack 

Portfolio Manager

Australian Corporate Bond Company

Investment Strategy and Approach

To ensure the best opportunity to meet the starter pack’s objectives, ACBC selects a portfolio of XTBs using a 2-stage quantitative process, with a qualitative overlay.

Quantitative Process

Stage 1: Selection

Define the investment universe of securities using the following criteria:

  • Rank the top 100 Australian Brands, from the highest Yield to Maturity
  • Investment grade credit only¹
  • Weighting parameters (issuer, security, sector²)
  • Available liquidity

¹ At the time of investment decision
² As defined by GICS Sub Industry

Stage 2: Application

Apply a set of rules to select an optimal Top Brands Starter Pack. 

Qualitative Overlay

Adjustments may be made to the Starter Pack. These adjustments may be made to reflect market conditions, despite the rules being satisfied.

The general approach is to hold securities to maturity.  However, changes may be made in response to an improvement to the Starter Pack, by switching securities. 

Parameters

PARAMETERS
Investment Universe/Authorised investments Available XTBs, fixed or floating
Target number of securities 5
Minimum security rating Individual bonds must be Investment Grade at the time of inclusion within the starter pack
Maximum individual issuer exposure 20%
Maximum individual security weighting² 20%
Maximum individual sector weighting² 20%
Capital structure parameters
  • 100% exposure to senior corporate bonds
  • 0% exposure to hybrids
Benchmark RBA cash rate
Liquidity All XTBs must have sufficient observable liquidity
Start Date 16 November 2016

Maintenance of the portfolio

  • The portfolio will be reviewed monthly on the second Wednesday of each month
  • All changes in the portfolio will be made in expectation there can and will be a bid and offer of the XTB on ASX (no underlying bond liquidity will mean no XTB liquidity on ASX and so a portfolio change to that XTB may not occur)
  • Only increase the number of XTBs in the portfolio if it increases the YTM by 5% (as a % of the rate, e.g. 3.50% to 3.68%)
  • Only switch an XTB (sell an XTB and buy a new XTB), if it increases the YTM by 5% (as a percentage of the rate)

More about this Starter Pack

XTB Financial Services Guide

Download a copy of our Financial Services Guide on the link below.

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What are XTBs?

Find out how they work and how to use them

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How to select XTBs

How do you choose between the range of XTBs?

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Available XTBs

Check out the range of fixed and floating XTBs available on ASX

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Cash Flow Tool

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