3 Reasons to Consider Australian Bonds Today
Text on screen: Lucy Garth, Head of Marketing Australia and New Zealand
Rob, can you give us your top three reasons for why we should be thinking about getting into Australian bonds right now?
Text on screen: Rob Mead, Co-Head of Asia Pacific Portfolio Management
Lucy, I don't know how I'm going to narrow it down to three, but three reasons, very, very importantly, Aussie bonds are a great source of diversification.
It's a vibrant market, it's a very stable rule of law, fiscal discipline, and yields are still attractive.
Second one is on a relative value. Many people may not know just the depth of the Australian market. There's so much opportunity. Things like state government bonds
that have been trading at much wider spreads. The credit market has been expanding rapidly, not only in corporate credit, but also in structured credit, RMBS, ABS, other structured deals that have been very attractive.
And the final thing is income. Especially with the hybrid market starting to evaporate,
investors need income. Australian bonds look attractive on a global basis. They generate income. We think the RBA is going to keep cutting rates. So even on a relative basis versus other alternatives for income generation, Australian bonds look very attractive.