Question: My SMSF has a high proportion of mainly bank hybrids. What will be the share price effect if the prices of banks come down in this environment?
Answer (By Paul Rickard): There really shouldn't be too much impact on the prices of bank hybrid securities. Spreads might move out a touch (meaning marginally lower hybrid prices) simply because yields on bank shares will have gone up. So, to retain relative value, yields on hybrid securities need to be higher.
Overall, the impact shouldn't be that material.