Risks of investing in XTBs

As with all investments, there are risks you should be aware of before making an investment decision.

Credit risk

Each XTB is exposed to the creditworthiness of the issuer of the underlying bonds.

Liquidity risk

Once quoted on ASX, the market for each XTB may not be liquid, meaning investors may not be able to sell XTBs prior to the maturity date.

Concentration risk

Investors with a single XTB will not benefit from the diversification of exposure to a number of ASX listed corporates, or from a basket of different type of assets.

Market risk

The performance of XTBs is linked to the performance of the underlying bonds, after fees and expenses. There is a risk that the value of the underlying bonds may decline in response to market factors.

Trust risk

XTBs are units in a unit trust, as such there are risks that the fees and expenses associated with XTBs may increase over time. There is also a risk that the Securities Manager or the Responsible Entity or material service providers may change or they may fail to perform their obligations.

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