Investing

XTBs – The Year in Review

14 May marked a year since XTBs launched on ASX

With over $50m of XTBs sold, and $14m of this in April alone, it has been a year of education, sales and expansion.

XTBs – The Year in Review

We started with 17 XTBs and added 3 more tranches in Q4 2015, including the first floating XTBs, which are popular. We will soon see 6 new fixed-rate XTBs start trading next week.

In Q3 2015 we welcomed the 2nd XTB Market Maker, Challis Investment Partners (CIP), which trades through Pershing.  Both Deutsche and CIP provide XTB spreads that are usually as tight or tighter than the underlying bond spreads.  CIP provides another dimension for XTBs as it provides a focus on block trades.  As a specialist bond/XTB Market Maker, CIP can focus on XTBs on a bond-by-bond and client-by-client basis, so we’ve been able to execute block trades in XTBs.

Broad based appeal

XTBs are now being bought by brokers and clients in State capitals, and across regional centres in NSW, QLD, VIC, SA and more recently in WA, where we began our education efforts recently.

The very broad applicability of XTBs starts with their appeal as a capital-stable, higher-yielding alternative to Cash and TD investments, without the volatility of equities & hybrids.

What’s next for XTBs

In the year ahead we’ll see a further expansion of the range, as well as more SMA and model portfolios (MPs).

The first SMAs and Model Portfolios are already on-line and this development is important for many advisers.

Top 5 XTBs traded to date

Ranking 1 Month 3 Month 6 Month 9 Month Since Launch
1 YTMWOW YTMWOW YTMWOW YTMWOW YTMWOW
2 YTMLLC YTMAZJ YTMAZJ YTMAZJ YTMAZJ
3 YTMAZJ YTMLLC YTMLLC YTMLLC YTMLLC
4 YTMBHP YTMF03 YTMLL1 YTMLL1 YTMLL1
5 YTMTLS YTMF06 YTMF03 YTMTLS YTMTLS
Source: Australian Corporate Bond Company. Data as at 13 May 2016

Thank you for your support

We’ve enjoyed bringing XTBs to market and the board and management of ACBC Ltd would like to thank all advisers and brokers for their ongoing support.

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