XTB Concentrated High Yield Model Portfolio

XTB Concentrated High Yield Model PortfolioConcentrated High Yield Portfolio

Investment objective

Within the investable universe of ASX traded XTBs to construct a fixed income model portfolio that aims to provide:

  • A regular and predictable income stream
  • A¬†capital preservation focus and low levels of price volatility
  • An absolute return that is above returns on term deposits
  • Liquidity, to ensure investment flexibility

Model portfolio manager

Australian Corporate Bond Company Limited (ACBC)

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Investment strategy and approach

To ensure the best opportunity to meet the model portfolio’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 only¬Ļ
  • Weighting parameters (issuer, security, sector¬≤)
  • Available liquidity

¬Ļ At the time of establishment
² As defined by GICS Sub Industry

Stage 2: Application

Apply a set of rules to select an optimal XTB Concentrated High Yield model portfolio.

Qualitative overlay

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

The general approach is to hold securities to maturity.  However, model portfolio changes may be made in response to:

  • An increase in the yield to maturity, by adding¬†securities
  • Improvement to the portfolio, by switching securities

Designed for investors who …

  • Seek a transparent and capital-stable fixed income model portfolio that offers a regular and predictable income stream
  • Are looking for lower risk than equities and hybrids and higher returns than ‚Äėcash-like‚Äô investments

Portfolio parameters

Inception date 30 August 2016
Investment universe Available XTBs, fixed or floating
Target number of securities 5
Minimum credit rating Individual bonds must be investment grade at the time of inclusion within the model portfolio
Maximum individual issuer exposure 25%
Maximum individual security weighting¬Ļ 25%
Maximum individual sector weighting² 40%
Capital structure parameters
  • 100% exposure to senior corporate bonds
  • 0% exposure to hybrids
Benchmark RBA cash rate
Maximum maturity Maximum maturity of an XTB – 10 years
Liquidity All XTBs must have sufficient observable liquidity

View portfolio rules and maintenance

View Model Portfolio Performance Reports

Request this portfolio

To request more information about this portfolio, and receive details of the XTBs included within the portfolio please contact us, or complete the form on the link below:

Tel: 1800 995 993

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