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Term deposits - not the only story in town


Peter Fullerton

Peter Fullerton

Credit Analyst

Many commentators advocate shopping around the banks for a better mortgage interest rate. This same principle of shopping around also applies when investing funds in a bank by looking at the various parts of the capital structure to gain a more attractive rate of return. There are a multitude of instruments issued by banks (and corporates) that sit between bank deposits and equities on the capital structure spectrum, offering a yield which can be higher than a term deposit but with potentially more capital stability when compared to the issued shares. However, a large number of these opportunities are only available to institutional investors, including Schroders, and cannot be directly acquired by individual investors. In this article, we look at the benefits that selectively accessing these opportunities can provide to the Schroder Credit Securities Fund.

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Opinions, estimates and projections in this article constitute the current judgement of the author as of the date of this article. They do not necessarily reflect the opinions of Schroder Investment Management Australia Limited, ABN 22 000 443 274, AFS Licence 226473 ("Schroders") or any member of the Schroders Group and are subject to change without notice. In preparing this document, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this article. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this article or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this article or any other person. This document does not contain, and should not be relied on as containing any investment, accounting, legal or tax advice. Schroders may record and monitor telephone calls for security, training and compliance purposes.