Investing

Selecting XTBs by credit risk

Applying a credit risk filter

You might be concerned with being over-exposed to any single bond issuer (too much credit risk). If so, as a basic filter continue to sort by YTM, but then select only 1 XTB per bond issuer in your portfolio.

XTBs filtered by credit risk (highest to lowest)

ASX CODE UNDERLYING BOND ISSUER MATURITY DATE COUPON TYPE COUPON P.A. INDICATIVE YIELD*
YTMAWC Alumina 19 NOV 2019 FIXED 5.50% 4.881%
YTMDO1 Downer 11 MAR 2022 FIXED 4.50% 4.044%
YTMQF3 Qantas 19 MAY 2022 FIXED 7.75% 3.884%
YTMAZJ Aurizon 28 OCT 2022 FIXED 5.75% 3.856%
YTMLL1 Lend Lease 13 MAY 2020 FIXED 6.00% 3.602%
YTMAST Ausnet 28 JUN 2022 FIXED 5.75% 3.247%
YTMAGL AGL Energy 05 NOV 2021 FIXED 5.00% 3.205%
YTMAPA APA Group 22 JUL 2020 FIXED 7.75% 3.195%
* Data as at 06 JUL 2016

This would remove 2 of the 3 Qantas XTBs, and 1 of the 2 Downer XTBs.

Result = A portfolio with 8 XTBs with a 3.74%* YTM on the date this data was taken.

Other ways to narrow your selection

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

Market Performance

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Available XTBs

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Cash Flow Tool

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