Wednesday 23 March 2022 by Jessica Rusit Retail-sample-portfolio-march-2022 Trade opportunities

Retail sample portfolio update - March

On launching the Sample Retail Portfolio late last year, additional bonds have since been made retail available, providing further attractive returns. Here we provide an update on the Sample Retail Portfolio for the month.


Last year we announced changes to our product offering, where the minimum portfolio investment was lowered to just $50,000 for all clients, and we materially expanded the list of bonds available to retail investors. This was in keeping with FIIG’s core objective to make bonds more accessible to all Australian investors.

In conjunction with the expanded retail bond offering, we also launched the Sample Retail Portfolio, to provide retail investors with a reference tool on how to build a general balanced portfolio, not taking into consideration any individual investment goals or preferences. The Sample Retail Portfolio, along with the full list of retail available bonds (and Fact Sheets from our FIIG Credit Research Team on each bond), can be found on the FIIG Website here.

Retail Update

Market sentiment into the new month has been dominated by the conflict in Ukraine, with demand for safe-haven government bonds tightening yields. It was only a few weeks earlier the talk was mostly around yields pushing higher and the market pricing in aggressive rate hikes from central banks.

As such, we’ve seen a general improvement in the capital price on some of the longer-dated investment grade fixed coupon bonds in the Sample Retail Portfolio.

FIIG made an additional seven bonds retail available since launching, with the most recent being the Defence Bank 2026c floating rate note, paying a quarterly coupon of Bank Bill Swap Rate (BBSW) plus 3.15%. We continue to target any available supply, with it being a smaller issue.

Retail Sample Portfolio

The Sample Retail Portfolio is a balanced portfolio, where we include a mix of investment grade and higher-yielding exposures while still maintaining a balance between risk and return, skewed towards preserving capital rather than chasing yield.

It aims to have between 8-10 positions, with the high yielding bonds in smaller parcel sizes to reflect their riskier nature.

The current portfolio has 10 bonds, yields 4.30% indicatively to worst and is an approximate $200k spend.

As mentioned earlier, an additional seven new bonds were made retail available, and offered compelling value. As such, we included some of these new names in favour of a few existing positions we had in the portfolio.

The AMP 2023c floating rate note, being shorter-dated, was switched out in preference for the Ampol 2026c floating rate note. The Ampol 2023c notes offer a higher margin, which will provide a better income stream for the portfolio.

For this same reason and an improvement in yield, the Qantas 2029 bond was replaced with Qantas 2030. While remaining with the same credit exposure, the Qantas 2030 pays a semi-annual fixed coupon of 5.25%.

The Ausnet 2025c hybrid was included, adding a utilities exposure to the portfolio, which is a preferred sector being typically more defensive. The Genworth 2025c floating rate note was another addition, with its higher coupon margin of Bank Bill Swap rate (BBSW) plus 5.00% and projected yield ticked lots of boxes to replace some higher-yielding exposures.

Omni Bridgeway’s 2026 fixed coupon bond was switched out with supply limited, while Elanor 2022 is now short-dated with its maturity later this year.

The NAB 2029c fixed coupon hybrid replaced the NAB 2025c floating rate note hybrid to rebalance the fixed coupon exposures in the portfolio.

To view and download our Sample Retail Portfolio, please click here.