Wednesday 22 October 2025 by Jessica Rusit Trade opportunities

Retail Sample Portfolio Update – October 2025

With new bonds added to the retail product offering, we’ve updated the Sample Retail Portfolio for the month of October.

We start October off the back of a late RBA meeting for the month of September, where rates were kept on hold as expected, and a more hawkish tone was maintained. Markets have pushed out the next rate cut until early 2026, as opposed to in November on stronger data releases of late.

The US Federal Reserve however has a harder job with inflation having the potential to break-out on escalating tariffs and weaker jobs data. Although with the US government shutdown (at time of writing) due to federal budget disagreements between both parties, there has been a delay in the release of economic updates, including key jobs data. As such it’s hard to completely understand how the US economy is tracking.

It’s been a monster month of new issuance for the Australian bond market, and despite the amount and size of the new deals, demand hasn’t seemed to waiver. In fact, the recent AMP Bank Limited transaction was eight times oversubscribed, with an orderbook in excess of AUD1.01bn and only AUD125m raised.

There have been two new bonds added to the Retail product offering, both the Transurban 2034 and Qantas 2034 senior unsecured bonds. Supply is limited in both, but we will look to add one of these to the portfolio when there is some available.

We exited some of the lower-yielding bonds in favour of the Heartland floating rate note for the month, which has also improved the return of the portfolio. Here we further discuss the changes we’ve made for the month.

Retail Sample Portfolio

The Sample Retail Portfolio is a balanced portfolio, designed to offer an appropriate level of risk with return. Overall, it remains more skewed towards preserving capital rather than chasing yield.

The portfolio is expected to yield around 5.19%* to maturity for the month, and has approximately $206k invested.

As previously mentioned, we continue to look for opportunities to reduce the number of holdings in the portfolio, which had grown to 20, and with supply in the Heartland 2029c Tier 2 Subordinated note becoming available we were able to. We exited our holding of the Liberty 2029 floating rate note and AMP Bank Limited 2027 callable, rolling both into the Heartland 2029 callable issue. The Heartland 2029 callable note is sub-investment grade, and as such offers a higher yield than the investment grade Liberty and AMP notes in the portfolio. While we dropped down from an investment grade rating to sub-investment grade, we were able to maintain a floating rate exposure. As such there are now 16 bonds in the portfolio, which still maintains adequate diversification and a better return.

The Qantas 2034 and Transurban 2034 senior secured bonds have also been made available to retail, however noting supply is limited in both bonds. Both are investment grade bonds and offering attractive yields, so we’ll look to add an allocation once supply is available. We continue to favour high-quality credit for the portfolio, with selective and smaller allocations to high yield exposures.

The Sample Retail Portfolio, along with the full list of retail available bonds, can be found on the FIIG Website here. Factsheets are also available via MyFIIG.

*Please note the indicative yield shown is the expected yield to the assumed maturity/call dates of the bonds included in the portfolio, based on swaps rates at the time of writing.