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:
