Should I sell SYD and TCL?

My SMSF is in pension mode, invested in equities apart from a small amount of cash. My primary aim is income with some capital growth to keep up with inflation. I hold SYD and TCL in my portfolio and wonder if I should be considering selling as what I am hearing is that these “bond like” shares will not perform well in the near future. I have a 24% gain on SYD and 14% on TCL.

Thank you

 

A: Thanks for the question.

While both TCL and SYD are characterized as “bond style” investments, I think this is misleading because both stocks are strongly growing their revenues (and distributions). They are quite leveraged, but at least in Transurban’s case, fully hedged. So, the interest rate risk comes down to a rollover on maturity risk.

I think market panic like today creates opportunities. I am a huge Transurban fan, so I bought some today! Sydney Airport is a little different, and the best days to sell might be behind you, but again, I don’t think I would be rushing to sell.

I should add that my view is a bit at odds with the market, who will probably keep labeling these stocks as “bond like”.

regards


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