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Your latest article indicates you are a bit of a fan of the hybrid securities market. However, any hint of ASX listed credit is absent from your income model portfolio.
I appreciate everyone’s circumstances differ, but do you see a place for this in an SMSF in pension mode for over 60’s?
If so, at what levels?
A: Thanks for the question.
The ‘income’ and ‘growth’ portfolios we publish are quite deliberately equities only. Further, I consider hybrid securities to be part of my ‘fixed income/bond’ weighting.
Because they are a crossover security, some commentators make the case that hybrid securities should be considered part of your equities weighting. I don’t subscribe to this argument, because while they potentially have equity downside risk, they don’t have equity upside gain potential. Furthermore, most of these securities will have reasonably stable capital prices – the downside risk is possible, but in most cases, unlikely.
And yes – I do see a place for hybrids within your asset allocation – as part of your weighting to bonds/fixed interest – however it would be relatively small.
