An entity of the Perennial Group, Daintree’s hybrid fund, which was officially made available to investors in the Australian market in September, has been quoted on the ASX for the first time on Wednesday.
The fund invests in a diversified portfolio of 25-125 hybrid bank securities – the aim of the fund is to give investors a return of 3.5-4.5 per cent per annum, above the cash rate, with quarterly income distributions.
According to Brad Dunn, the portfolio manager for the fund at Daintree, hybrids offer some of the best yield in the fixed income market for a near-investment grade credit rating, with lower risk than investing in equities markets.
“There are very few active hybrid funds quoted on exchanges. Australia only represents 4 per cent of the global hybrid market, so offering access to global hybrids will help increase access to more diversified and less concentrated hybrid exposures,” Mr Dunn said.
The fund is available in an innovative single unit structure, which allows investors to apply for units directly, via a platform or on the ASX via a stockbroker or share trading account.
“Our goal was to allow investors to choose their preferred method of access, with the option of having the real-time liquidity that comes with investing on an exchange”, explained Mr Dunn.
The Daintree Hybrid Opportunities Fund invests in the hybrid securities of global banks including Bank of America, Credit Suisse, Lloyds Bank and ING Group.
Between the fund’s launch to wholesale investors on 1 March last year and 30 September 2021, the fund returned 12.61 per cent after fees. In the last 12 months, it has returned 6.47 per cent (net of fees).