Not all hybrids are created equal - the devil's in the detail
Hybrid securities blend characteristics of both debt and equity. Hybrids have been a popular method for SMSF’s and retail investors seeking above cash returns in their fixed income investments when making an allocation to defensive assets. But are hybrids truly defensive?
Many hybrids issued by Australian companies are listed on the ASX, making them easily accessible and offering investors liquidity and transparent pricing. With both ANZ and Woolworths recently marketing new hybrids, it’s poignant to remind investors that with the promise of higher returns, comes higher risk. So what are the risks?
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