Investing

Selecting XTBs based on Maturity Date

Many investors choose investments that allow them to plan their income to match their outgoings. It’s called ‘outcome based investing’.

The highly defined and predictable nature of bonds allows for this type of investment behaviour.

By selecting a portfolio of 7 XTBs so that 1 XTB per year matures, you get a portfolio with both capital and income payments each year. You would need to replace the XTB that matures each year to keep this rolling forward.

Filtering by maturity date is also called laddering. In the example below, we’re still selecting the XTBs with the highest yields, and then adding the laddering overlay.

In the 7 XTB portfolio below, approximately 1 XTB per year matures for an average Yield of 3.54%*

Selecting XTBs by Maturity Date

ASX CODE UNDERLYING BOND ISSUER MATURITY DATE COUPON TYPE COUPON P.A. INDICATIVE YIELD*
YTMF02 Bank of Queensland 07 NOV 2016 FLOATING BBSW + 1.15% 2.221%
YTMMG1 Mirvac 18 DEC 2017 FIXED 5.50% 2.634%
YTMDOW Downer 29 NOV 2018 FIXED 5.75% 3.374%
YTMAWC Alumina 19 NOV 2019 FIXED 5.50% 4.881%
YTMAZJ Aurizon 28 OCT 2020 FIXED 5.75% 3.856%
YTMQF2 Qantas 11 JUN 2021 FIXED 7.50% 3.792%
YTMDO1 Downer 11 MAR 2022 FIXED 4.50% 4.004%
* Data as at 06 JUL 2016

Other ways to narrow your selection

There are a number of other filters you can use to narrow your selection. Some of these include:

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Available XTBs

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Maturity Ladder Model Portfolio

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