Karen McLeod

XTB, an Australian-based provider of ASX-traded corporate bonds, is offering a new fixed income portfolio of environmental, social, and governance (ESG) approved securities to meet growing demand for ethical investments.

The XTB Emerald Fixed Income Portfolio is a managed portfolio of individual bond units (XTBs). The underlying bonds are issued by some of Australia’s top companies which have met The Emerald Club’s screening criteria. Bloomberg ESG Data is used to select companies with a strong track record of mitigating environmental, social, and governance risks relative to alternatives.

The portfolio is available from today on the HUB24 platform.

The portfolio provides investors a regular and predictable income stream, with an investment risk profile less than equities and hybrids, and a higher return than ‘cash-like’ investments.  It has an absolute return objective of 1% higher than the cash rate.

“The portfolio includes ASX-traded XTBs with underlying bonds from companies considered to have sound ESG policies,” says Richard Murphy, XTB co-founder and CEO.

“The portfolio is comprised of companies which are able to provide viable returns to investors while at the same time mitigating the environmental and social impacts of their business activity, operating in a manner respectful of society and managing within emerging ecological constraints. It helps advisers to match their client’s investments with their values.”

The companies in the XTB Emerald Fixed Income Portfolio have been selected by The Emerald Club, a responsible investment platform whose purpose is to make responsible investing more accessible and attractive to investors.

The Emerald Club runs a screen, by conducting an analysis of ESG factors based on a company’s annual disclosure of various metrics in its corporate social responsibility report. Screens include – total greenhouse gas emissions, water intensity per sales, and renewable energy use.

Karen McLeod, Principal Financial Adviser at Ethical Investment Advisers, said clients are increasingly seeking value-aligned investments and this portfolio directly caters to growing investor demand for ESG fixed income options.

“We are excited to see new developments in the ESG space, particularly in fixed income. Our clients want to know who they are investing with. Separately Managed Accounts (SMAs) of XTBs provide that next level of engagement and transparency that we have been looking for,” Ms McLeod said.

XTBs generated significant interest from investors in 2017, with funds under management up 117% to $265 million in 2017, from $122 million a year earlier1.

“XTBs are helping to fill the gap between low risk, low return term deposits and higher risk equities in the Australian market,” Mr Murphy said.

“Corporate bonds are the missing link on the ASX, providing retail investors with up to 50%2 greater returns than term deposits, with the added convenience of daily liquidity through ASX trading.

“More than doubling FUM in a year is testament to the fact that many investors have been seeking alternative defensive investments for their portfolios.”

There are now more than 50 XTBs available on the Australian market, which give investors exposure to specific, individual corporate bonds issued by blue-chip companies including AMP, BHP, Qantas, and Telstra.

The post New investment offering provides Australia’s first ‘green’ fixed income portfolio on ASX  appeared first on AdviserVoice.

Richard Murphy

XTB, an Australian-based provider of Australian Stock Exchange-traded corporate bond investments, said today that its fixed-rate portfolios considerably outperformed both the credit index and the comparative bond ETF market in 2017.

The best-performing XTB portfolio, the Concentrated High Yield Portfolio, delivered a one-year return of 7.5%, versus a 5.1% return from the credit index. The top four comparative bond ETFs delivered annual performance of between 2.1% and 5.2%.

“XTBs allow investors to gain exposure to individual Australian corporate bonds issued by leading corporates on the ASX, just like buying shares in the same companies. Each XTB delivers the price stability and income from a specific underlying corporate bond with no minimum investment,” said XTB co-founder and CEO Richard Murphy.

XTBs generated significant interest from investors in 2017, with funds under management up 117% to $265 million in 2017, up from $122 million in 2016.

Mr Murphy said the strong performance of XTBs on the ASX, coupled with the low interest rate environment had delivered a solid 2017 for the firm.

“More than doubling FUM in a year is testament to the fact that many investors have been seeking alternative defensive investments for their portfolios,” he said.

Mr Murphy said XTBs are helping to fill the gap between low risk, low return term deposits and higher risk equities in the Australian market.

“Over the holiday period all the big four banks cut their base term deposit rates while raising introductory rates, so unless you are a constant shopper, you are likely to be getting a very low rate on term deposits,” he said.

“Corporate bonds are the missing link on the ASX, providing investors with up to 40% greater returns than term deposits, with the added convenience of daily liquidity through ASX trading.”

There are now more than 50 XTBs available on the Australian market, which give investors exposure to specific, individual corporate bonds issued by blue-chip companies including AMP, BHP, Qantas, and Telstra.

XTBs are also offered via most of Australia’s leading platforms and wraps, including AMP North, BT Wrap, HUB24, Macquarie, and Praemium.

The post XTB portfolios deliver strong end to 2017 appeared first on AdviserVoice.

Richard Murphy

XTB, an Australian-based provider of Australian Stock Exchange-traded corporate bond investments, said yesterday that its fixed-rate portfolios considerably outperformed both the Composite Bond Index and the Credit Index in the past 12 months.

As a result, XTB Portfolios also markedly outperformed a range of popular investment products that track these indices – including Exchange Traded Funds (ETFs), ETPs and managed funds.

The XTB Concentrated High Yield Portfolio had a yield to maturity of 3.31%¹ on 9 October 2017.

“In comparison, term deposit rates are at record lows of 1.45% to 2.8%² – which is all an investor is given for locking your funds up in a term deposit for 5 years,” said Mr Murphy.

“And unlike term deposits, XTBs have the added benefit that they can be sold on the ASX throughout their life, or held to maturity for investors to receive their face value.”

APRA’s [September] household deposit figures show bank held deposits were at a record $858 billion. “Australian investors have resorted to the familiarity of term deposits.”

XTB has also started two separately managed accounts on Praemium’s platforms and Macquarie’s Investment Wrap. They have also made XTBs available on AMP North Super and Allocated Pension Platform. A Responsible Investing SMA is also expected to be live later this year.

The post XTB Portfolios Outperform Credit Index by More Than 3.25% p.a. appeared first on AdviserVoice.

Richard Murphy

XTB, an Australian-based provider of Australian Stock Exchange-traded corporate bond units, said today it planned to expand its range of XTBs and also start a Responsible Investing separately managed account (SMA).

“Discussions with ASX to launch the new PDS for the expanded range are underway,” said XTB co-founder and Chief Executive Officer Richard Murphy. “The continued broadening of our product range reinforces XTB’s commitment to driving innovation in the fixed income market.

“The expansion of the range is likely to include XTBs with higher yields. This will broaden the choices of XTBs available to retail investors and advisers that provide more than 40% uplift on current Term Deposit rates.”

Extending the XTB Maturity Ladder

Mr Murphy said the new XTBs would allow Australian investors to develop a laddered portfolio of fixed-rate bonds, where maturities occur annually.  Laddering allows investors to manage their portfolios in an uncertain interest rate environment and take advantage of any future rate increases.

“The new XTBs will allow investors to strategically extend their bond ladder out to 2025,” said Mr Murphy.

“The approach of reinvesting the rate rise-impervious capital each year as a bond in the portfolio matures is becoming a popular approach we’re seeing from investors.  It’s a strategy that works well when interest rates rise.”

Responsible investing

Ian Martin, XTB’s co-founder and Chief Investment Officer, said XTB expects to offer a Responsible Investing SMA before the end of the year, following strong investor interest for products that deliver anticipated returns as well as meet ethical requirements.

“The demand for ethical investments has increased substantially over recent years,” said Mr Martin. “Our upcoming Responsible Investing product will deliver what investors are looking for within the increasingly popular SMA structure.”

XTB currently provides investors with the ability to gain exposure to individual Australian corporate bonds issued by leading corporates on the ASX, just like buying shares in the same companies.

The post XTB to expand range of investment choices appeared first on AdviserVoice.

Ian Martin

Fixed income innovator XTB today announced the expansion of its pure fixed income separately managed account (SMA) solution onto Macquarie Wrap (IDPS). The ‘ACBC Fixed Income No. 1 Model Portfolio’ was first available to financial advisers in February using Praemium SMA and SuperSMA platforms.

Today’s expansion to Macquarie Wrap enables more independent financial advisers to access the portfolio that invests solely in individual investment-grade senior corporate bonds through XTBs.

The ACBC Fixed Income No. 1 Model Portfolio was designed by Ian Martin, XTB Chief Investment Officer. Ian said making the SMA Model Portfolio available on Macquarie Wrap was a sign of continued support for individual fixed income model portfolios across numerous distribution channels.

“I developed the model portfolio in direct response to demand from advisers and will continue to work closely with adviser groups to make it more broadly available. I believe the demand for fixed income solutions is growing, in particular for portfolios that derive their returns from individual senior corporate bonds.”

Since launching in 2015, the firm has unveiled a number of new solutions to make fixed income more accessible, including white-labelled XTB model portfolios for adviser networks.

Ian Martin commented, “Our aim is to provide transparent and easy-to-access fixed-income solutions for both financial advisers and individual investors.We are proud to be driving fixed income innovation that helps Australian investors achieve more balanced investment portfolios. We look forward to announcing additional new SMA model portfolios in the coming months.”

The launch of the SMA Model Portfolio onto Macquarie Wrap coincides with the expansion of the suite of XTBs on ASX. Three more fixed-rate XTBs are today available over senior corporate bonds from Dexus, Telstra and Transurban. This brings the total number of XTBs on ASX to 50.

The post XTB expands adviser access to Fixed Income SMA Model Portfolio to Macquarie Wrap appeared first on AdviserVoice.

The announcement follows a period of strong growth for XTB, which saw it double its funds under management in the past six months, reaching $200m.

In his new role, Mr Martin will work closely with dealer groups, platforms, asset consultants and research houses, with a focus on delivering customised fixed income solutions.

Mr Martin is also an Executive Director and co-founder of the Australian Corporate Bond Company (ACBC), which launched XTBs to market in 2015.

Mr Martin has over 30 years’ experience in fixed income markets globally. His previous roles include Head of Rates, Australia and New Zealand for Deutsche Bank and Head of Trading Fixed Income for General Re Financial Products. He was a member of the Australian Financial Markets Association (AFMA) Market Governance Committee, a board member of Yieldbroker and a member of Deutsche Bank’s Global Rates Executive Committee.

Commenting on the appointment, Richard Murphy, XTB co-founder and CEO said the new role reflected the ongoing evolution of the business and growing demand for customised fixed income solutions.

“Ian’s appointment to CIO is a pivotal milestone for the business. He has deep expertise in fixed income markets, home and abroad, and a proven track record of developing fixed income solutions in the institutional market. This will enable us to respond to the growing market demand for tailored fixed income model portfolios and Separately Managed Account (SMA) solutions,” Mr Murphy said.

“Incorporating both qualitative and quantitative techniques, Ian has already successfully designed a range of fixed income model portfolios. His portfolios seek to optimise defined-outcomes for end-clients and are resonating strongly across the market.”

Mr Martin said he was “passionate about fixed income innovation and ensuring all Australian investors have access to the right fixed income opportunities.”

“Advisers and their clients continue to recognise the importance of fixed income in a well-balanced portfolio and I am looking forward to continuing to innovate the way in which they can access this important asset class.”

The post XTB appoints Chief Investment Officer appeared first on AdviserVoice.