I am considering investing in either Westpac Capital notes 6 or Commonwealth Bank Pearls.
Which do you consider will deliver the best returns over the 5 year investment period?
A: They both pay the same distribution of a grossed up 90 day bank bill plus 3.7% pa..
Commonwealth Bank PERLS XI are a little shorter in term to the call date than the Westpac Capital Notes 6.
If both investments are redeemed (as anticipated) on the mandatory redemption date, you will get your $100 back. There is no capital gain.
If I had a preference, I would probably opt for the Commonwealth Bank PERLS XI. That said, assuming no change in the credit quality of either of the Banks, the returns over 5 years should be the same.
