Page 1 - Private Wealth Specialist Income SMA PDF Factsheet

SMA Portfolio Change

Specialist Income SMA (Assertive, Balanced & Moderate)

Hybrid redeemed and replaced

As at 14 April 2025

Hybrid securities typically have maturity dates where they can be converted to a different asset
class or redeemed. The hybrid security – ANZ Capital Notes 5 (AN3PH) investment within the
Specialist Income portfolios has been redeemed and needs to be replaced with another
investment.

Redeemed:

On 20 March 2025, ANZ Capital Notes 5 (AN3PH) reached its first call date and was redeemed
by ANZ. Each unit was redeemed for a par value of $100, along with a final distribution of
$1.5645.

Purchased:

Historically we have replaced matured hybrids with another hybrid option. Hybrid spreads have
tightened to low levels. Despite the attractive current yield, hybrids currently look expensive
relative to the risk they carry to other fixed income and bond options. We are also conscious
of changing liquidity conditions in this part of the market and the impact trading may have on
returns. For this reason, we have replaced AN3PH with the VanEck Australian Subordinated
Debt ETF (SUBD). SUBD is already owned in your portfolio, therefore this purchase increases
the existing allocation.

Description:

SUBD is an ETF which invests in a portfolio of subordinated bonds, with the aim of providing
investment returns before fees and other costs that track the performance of the iBoxx AUD
Investment Grade Subordinated Debt Mid Price Index. This provides investors with exposure
to a portfolio of regulatory Tier 2 Capital investment grade credit subordinated floating rate
bonds. These are similar to hybrid securities but are higher ranking in the issuer’s corporate
structure. The portfolio only includes AUD denominated floating rate bonds issued by