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Investment Strategy

Exclusive news and research content for FIIG clients.

  • FIIG Strategy - New Issue Alert - Westpac Tier 2

    Jul 16, 2019
    Banking giant, Westpac, has launched a dual tranche USD-denominated Tier 2 subordinated note. This would be the first Tier 2 issuance since APRA’s announcement that Australia’s four major banks are required to significantly increase their Tier 2 capital over the next four years.
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  • FIIG Strategy - The New Normal - Low rates are here to stay

    Jul 11, 2019
    Following the RBA’s back-to-back rate cuts at its June and July meetings, it’s time to settle into the fact that low interest rates are here to stay. With the official cash rate at a record low 1.00%, we look at strategies to optimise investor returns on fixed income portfolios.
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  • FIIG Strategy - New DirectBond - Western Digital Corp.

    Jul 05, 2019
    Western Digital Corp.’s 2026 maturity USD bond is the latest addition to FIIG’s DirectBond list. Rated one notch below investment grade (IG), it offers an attractive risk-return for investors seeking USD credit exposure with yield in excess of 4.50%pa.
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  • FIIG Strategy - Time to take stock as flight to safety takes off

    Jun 26, 2019
    Fund managers have been rotating out of their equity allocations into cash and bonds, according to the BofA Merrill Lynch Global Fund Manager Survey results for June. This is largely due to a pessimistic outlook and is a timely reminder that portfolios should be well-diversified with an allocation to more defensive assets.
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  • FIIG Strategy - High risk adjusted returns, a thing of the past

    Jun 21, 2019
    With bond yields continuing to move lower, investors are now adjusting to the new reality of risk adjusted returns.
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  • FIIG Strategy - New DirectBond - Barclays PLC

    Jun 18, 2019
    UK investment bank and financial services company, Barclays PLC, has launched an Australian dollar multi-tranche [5] year fixed coupon and floating rate note (FRN), and a [10] year fixed coupon note.
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  • FIIG Strategy - New DirectBond - Peabody Energy Corporation

    Jun 18, 2019
    The newest additions to FIIG’s USD DirectBond list are two high yield (HY) opportunities issued by Peabody Energy Corporation. Since emerging from Chapter 11 in 2017, it issued a shorter dated 2022 and medium-term 2025 maturity bond. We prefer the 2025 bond offering an attractive yield over 6.00%pa.
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  • FIIG Strategy - Understanding USD High Yield Bonds

    Jun 13, 2019
    The Australian bond market is faced with an insatiable demand currently, as bonds are maturing or being called, dwindling new issuance is limiting additional supply and there’s a thirst for yield. The liquidity and depth of the large USD high yield (HY) bond market is where savvy investors are looking to for opportunities, and for good reason, as we further explore.
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  • FIIG Strategy - Bond rally to continue as RBA signals further rate cuts

    Jun 06, 2019
    The RBA has cut the overnight cash rate (OCR) to the lowest level in history. With more rate cuts on the way and bond prices likely to rally further, we believe it is time for investors to start adjusting their expectation to a lower yielding environment
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  • FIIG Strategy - Understanding Covenants - May 2019

    May 31, 2019
    Covenants are a key line of defence for bondholders, especially when investing in unrated or sub investment grade bonds. They act to align the interests of both the issuer and the bondholders and serve as a layer of protection well ahead of any potential payment default. Here we look at the different covenants and how they work.
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  • FIIG Strategy - New DirectBond - Hunt Companies Inc

    May 30, 2019
    The newest addition to FIIG’s USD DirectBond list is a high yield (HY) opportunity issued by Hunt Companies Inc., offering an attractive yield above 6.60%pa. The sub investment grade bond is an ideal inclusion in a well-diversified portfolio for wholesale investors.
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  • FIIG Strategy - What could a lower cash rate mean for investors?

    May 24, 2019
    The RBA has explicitly stated that it is open to cutting cash rates as early as June 2019, so what does this mean for fixed income investors?
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  • FIIG Strategy - Defensive sectors protect portfolios against trade conflict

    May 16, 2019
    Markets have sharply sold-off in response to the ongoing US-China trade stand-off, and renewed calls from both sides for additional tariffs on goods. However, defensive sectors such as Utilities and Infrastructure, which are less impacted, have performed well in comparison.
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  • FIIG Strategy - USD HY - Use the rally to take some risk off the table

    May 09, 2019
    The first four months of this year have seen corporate bonds rally strongly across the ratings spectrum. We believe that investors should consider using this rally to reduce exposure to CCC rated securities, which remain the most vulnerable to any correction.
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  • FIIG Strategy - New Issue Alert - NAB announces plans for new Tier 2 issue

    May 08, 2019
    One of the major four banks in Australia, National Australia Bank Limited (NAB), has announced its plan to potentially issue a new Australian dollar Tier 2 style bond. The 10 year bond, callable after 5 years, is expected to price competitively to where existing Tier 2 issues are currently trading.
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  • FIIG Strategy - New Issue Alert - Next DC

    May 07, 2019
    ASX-listed data-centre provider, NextDC Limited (NextDC), has mandated NAB to arrange an increase to its AUD200m June 2022 floating rate notes.
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  • FIIG Strategy - Reduce reinvestment risk and increase returns - May 2019

    May 07, 2019
    As several bonds approach maturity or call dates over the coming few months, many investors could be exposing themselves to reinvestment risk and receiving lower returns by not reinvesting ahead of time. We look at the benefits of actively managing maturities and early redemptions to get the most out of bond portfolios.
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  • FIIG Strategy - New Issue Alert - Ausdrill

    May 03, 2019
    Ausdrill Finance Pty Ltd, a wholly owned subsidiary of ASX listed Ausdrill Limited, has announced its intention to issue a new USD denominated senior unsecured bond. The timing and pricing of this bond have not yet been announced.
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  • FIIG Strategy - US HY - moderating risk in USD portfolios

    Apr 17, 2019
    With uncertainty and volatility set to continue for some US high yield credits, now is the time to be reviewing and diversifying this part of portfolios. The recent recovery in price allows holders to reduce some positions and de-risk their USD high yield portfolios.
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  • FIIG Strategy - Downer launches new issue - April

    Apr 15, 2019
    Downer Group Finance (Downer) has launched a new fixed coupon AUD issue, with an indicative coupon of [3.75]%, maturing in 2026. It has priced tighter than recent peers, which reflects the strong demand for investment grade bonds in the current market environment.
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* Based on FIIG’s high yield sample portfolio. Click here to view. Subject to change and before fees. Please see our FSG for any applicable fees.