In an investment strategy for an SMSF, what area do CommBank Perils and the new ANZ Notes 2 fall into? Is it shares or term deposits or cash or something else?
A: Thanks for the question
I would include CBA PERLS, ANZ Capital Notes and other hybrid securities in my ‘fixed interest’ or ‘bond’ allocation. I certainly wouldn’t consider them to be “shares” or “cash”. You could also consider them as in the same category as ‘term deposits”.
While the interest rate is not ‘fixed’ (it is reset every 90 or 180 days), I think ‘fixed interest ‘ is probably the closest classification, as the hybrid is a long term, interest paying security.
Obviously, their risk characteristics are quite different to that of a government bond and some other fixed interest securities
Hope this helps.
