An investment in a hybrid security has the potential to provide investors with a regular income stream. Many hybrid securities also offer benefits not available from traditional interest-paying investments such as term deposits.
Hybrid securities can have the following advantages:
- pay a defined income stream
- generally return their face value at maturity
- enable you to diversify your investments
- are bought and sold on ASX
- may offer tax advantages.
Different hybrid securities can have very different characteristics and typically carry greater risks than most types of bonds. Investors should take care to inform themselves about the specific characteristics of a particular hybrid security before making a decision to invest.
Investing via ASX's interest rate security market
ASX's interest rate security market gives investors easy access to a market where they can buy and sell hybrid securities in the same way as they buy and sell shares.
The market provides investors and their advisers with ready access to information about the price, return (yield) and ratings of different hybrid securities and facilitates comparisons with other securities.
A list of hybrid securities and their prices are published daily in the Australian Financial Review, as well as being available on the ASX website.