 Welcome to the Fig Securities Introduction to Corporate Bonds webinar. My name's Elizabeth Moran. I'm Director of Education and Research here at Fig. Really happy that you could join us here today. Personally, I've been at Fig for nearly 10 years now and I write and edit the wire and I have a column in the Australian and I'm a fairly active presenter but have been an analyst for many years. I have with us today, or we have with us today Jake Conduction who is a senior Queensland dealer. He joined Fig about six years ago but has been in markets for about 20 years now working across equities, derivatives and bonds but he now concentrates exclusively in fixed income. Welcome, Jake. Thank you, Liz. Happy to be here. Fantastic. And we also are delighted to have Andrew Kidd who is Head of Client Services who has over five years at Fig. He's also been in financial services since 1998, including a 10-year stint in Europe with Allianz. Welcome, Andrew. Thank you very much. So I'll be presenting most of the presentation today and then Jake will follow up. He'll talk about some bonds that are available and Andy will finish talking about how you can sign up and open an account. Without further ado, let's get underway. This is our general disclaimer. So at Fig, we can only give general advice. We can't give personal advice. So if you're interested in setting up a bond portfolio with us, we'll make lots of suggestions to you but if you don't for whatever reason like a particular bond, you can say, well, Liz, we don't like that Adani bond. Can you find us something else? So we'll make other suggestions but we'll certainly give you plenty of help and there is research available on most of the company's bonds that we make available and of course our WIRE website which has a lot of news and up-to-date articles. So it's quite of a spoke asset class. You can tailor things to what you might need or want and your goals. So only general advice though. So why would you choose bonds? I think one of the main reasons is that they will diversify your holdings. So they'll diversify away from high-risk asset classes such as shares and property but they provide a lot of diversity in that there's this huge range of bonds. So you have government bonds of course which most of you will be aware of but there are also corporate bonds ranging from very low-risk issuers like our major banks right through to much higher-risk issuers, smaller companies with perhaps specific products in small geographic locations. So because of this range of diverse companies you can really add to the diversity of your holdings. Quite a few of Australian dollar bonds issued by companies not listed on the ASX. So you have companies like Apple, I'm sure you've heard of Apple. General Electric, another big US company issue Australian dollar denominated bonds but also you have infrastructure, joint venture type arrangements that aren't listed on the ASX. Those sorts of companies will issue bonds as well. The other main reasons I think are for capital preservation and income and capital preservation I think is becoming more and more important. People are starting to get a little bit jittery about markets and nervous that there might be a correction. At this point in the cycle typically people start selling down their equities and perhaps investing in bonds. So the way that they preserve capital is that they return the face value of the bond which is typically $100 at maturity. So there's a maturity date when you can be sure as long as the company continues to operate that you'll get your money back. Bonds also have defined income streams that can be either paid quarterly or half-yearly and a bond is actually a legal obligation so you get a lot of certainty with bonds. So the capital preservation and income I think are really important. Now a few people realise that bonds are tradable. So while some of them have very long terms to maturity you can trade, so you can buy and sell. So as soon as a bond is issued it goes onto the secondary over the counter markets a global huge market in fact double the size of the equity market and the bonds start to trade. So if you see a very long maturity date don't be too concerned because you can sell bonds prior to maturity. The other thing that few people realise is that you can get higher than expected returns and because bonds trade and are issued first issued at $100 that price of the bond will go up and down over its life. So if you bought a bond today for $100 and interest rates for example declined that bond price might climb to $104 or $105 or even quite a lot more than that and then you have the opportunity to sell and take that extra gain giving you an overall higher return. So while I would generally say to investors thinking about bonds you can expect to earn one to 2% more than term deposit rates throughout the life of your holdings. Investors can earn quite a lot more and we have, I would regularly have investors come and say to me well Liz last year I earned 11% it's fine you're telling me I might get 4 to 5 but I've earned a lot more than that and the way that we can do that is by trading. Now not all of our investors will trade bonds some roughly half in fact are quite happy just to buy and hold and receive that income and have that knowledge that they can expect capital return to them at maturity. So the last point on this slide is that bonds are lower risk than shares in the same company so if you're happy to invest in the shares in a company then you should be more than happy to invest in a bond. I'll explain that as we go through. So a bit of a snapshot a corporate bond is a loan to a company. You lend your money to the company and in return it agrees to repay you on a certain date and to pay you interest on certain dates. Very important that it's a legal obligation they must make those payments. I've already mentioned that the global bond market is about double the size of the share market. Unfortunately in Australia many individual investors haven't appreciated yet the advantages of holding bonds and own roughly it's a bit more than 1% but it's about 1.7% direct investment in bonds which is much lower than US and Europe where the average holdings are sort of more like 20, 25% in bonds. Now you see a whole lot of logos there underneath this slide. These all these companies issue Australian dollar denominated bonds. So you have BHP and Telstra you can see Morgan Stanley, the big US bank. Down the bottom of the slide in the middle there's a logo there that says AXA. Now AXA is a big French insurer, a life insurer and has for many, many years delivered very consistent profits but it's quite boring. It's not a high growth company as such but that consistency of the earnings mean bond holders are gonna be paying their interest and can expect capital and maturity. So that sort of issue gives us a lot of confidence and we really like those sorts of boring companies. You sort of have to start thinking about investing in bonds in a different way that you might to the shares. So how do bonds differ from shares? As I mentioned, you lend your money to the company so you can think of yourself as the banker and you will have defined interest payments quarterly or half yearly and you can expect the principal return of maturity. I think one of the main things with bonds for me is A, that it's that legal obligation and secondly, I like to think of a bond or when you're thinking about bonds, think of the survivability of the company. Is the company still going to be around in four or five years or maybe even 10 years when your bond matures because if you think it will be around you can then invest in the bond thinking you're gonna get your principal back at maturity. So I like to say one of the key drivers for investing in bonds is survivability. Now if we compare that to shares, you buy shares in the company, you're an owner in the company and you do that because you're expecting growth. You expect the dividend to grow and the capital or the price of the share to grow. But importantly, there is no guarantee of the dividend payment nor is there any guarantee of return of capital. You have to sell the share to recoup the capital and you have to take the price of the market at that point. So you're an owner with the shares versus a banker with the bonds and the bonds will get paid before share investors in the case of a wind up. Now I mentioned survivability with bonds. If you're thinking about shares, I think that key metric is growth. So to my mind, the two asset classes, survivability versus growth and I think it's much easier to judge survivability of a company. So I actually think the decision to invest is easier with bonds. So I wanted to give you an example here of BHP Billiton bonds versus shares. So about, it's probably about 18 months ago now, you'd appreciate the iron ore price dropped dramatically and a lot of the mining companies were facing losses and changes in circumstances. So if we look at the bonds versus the shares, throughout the economic cycle, no matter what happens, the company must pay interest on the bonds and they must return that face value $100 at maturity. Now one of the things we would look at before we invest is what other assets the company has to give us comfort that we're going to get our money back. So in BHP's case, it's asset rich. It's got a lot of cash on its balance sheet. It's issued in international bond markets over many years. So there are a lot of very familiar international investors in BHP. So that actually gives us comfort that they could issue other bonds in other currencies to repay us our interest and principal if they got into a little bit of trouble down the track. Of course, it has a lot of assets that can sell as well. So in November 2015, BHP issued a $6.5 billion US multi-currency bond. So it issued in US dollars and sterling and euro. One of the bonds we liked in that issuance was one with a call date in 2025. So that means the company can repay in 2025 but is not obliged to. We think it will pay in 2025. It issued at quite a high coupon. The coupon's actually the interest rate. We call it coupon, the interest. Jake, do you remember what it was? It was 7 something. 6.75. 6.75, 6.75 percent, which we recommended at the time. We thought that was a fantastic risk reward trade. What's happened, it's a fixed rate bond. So fixed rate bonds must pay that stated interest half-yearly for the life of the bond. But other investors also thought it really appealed. So they started buying up the bond and that forced the price of the bond up and the overall yield to maturity. We actually call that a yield to worst. It's that call date, the yield to the call date of 4.6 percent. So that's today if you buy it today. That's if you buy it today. So what's the price of that $100 bond now? It started off at $100. It's now trading about $114. $114. Investors have done very well on that. It still looks quite attractive. I think it looks still quite attractive too. But potentially if you had bought that bond, you could now sell for $114 or thereabouts and take the extra $14 return, really boosting your overall returns. So if we look at BHP shares, there is no guarantee of dividend payments and in fact they cut dividend payments by about 75% not that long ago. There is no maturity date. You are in a first loss position. If company is not doing well, the shares lose first. There is, as we mentioned, no obligation to pay a dividend. I think growth at this stage has got to be questionable. But very interesting that the share price has fluctuated between $17.54 and $27.89 over the last 12 months. So depending on where you're at in your investing life cycle, you might prefer that sort of consistency lower risk bond over the share. Or you may really think that growth is going to take off for BHP and have a preference for the share at this point. I guess the main points I'm trying to make here are that bonds provide that known income and return of capital and shares do not have that certainty. So a couple of facts that we think it's always nice to discuss. The Australian dollar bond market is worth about $1.6 trillion. It's huge. If we actually add back all the foreign currency bonds that Australian companies issue overseas, it almost doubles that figure. It's quite significant. The biggest issuers in Australia is the Commonwealth government and all the states and territories issue bonds as well. But the governments are the biggest issuers. Now, the vast majority of bonds are traded in what's known as the over-the-counter market. So this is a global market where institutions trade on behalf of their clients. Very much like foreign currency. You need to find someone to sell you foreign currency. You can't go out there and buy on an exchange. So most bonds are traded in the over-the-counter, not the ASX. So you do need a broker such as FIG to transact. As I mentioned, bonds can be sold prior to maturity. And I did also mention that opportunity for a higher gain, but I haven't yet talked about that you can lose money on bonds. So there are two ways you can lose money. The first is that you do sell prior to maturity. You might be nervous for whatever reason that a company is not doing so well and decide to sell out and the price of your bonds might have dropped in the meantime. The other way is that the company goes into a wind-up or liquidation. It defaults on its obligations. This is quite rare in Australia, especially for investment-grade companies. But then again, you're subject to a liquidator selling assets and applying the proceeds to you. But as long as that company survives, and if you hold to maturity with your bonds, you can always expect to have a positive return. Now, global best practice suggests that superannuation portfolios should contain quite significant allocations to bonds. So a few years ago, the OECD did a study of pension funds in 29 different countries. Now, it found that in Australia, our Australian pension funds had the highest allocation to shares, but also the highest allocation to cash. And it probably weren't surprising to learn we had the lowest allocation to bonds, which sit between those two. Now, we think a lot of the reason for this is that people just don't appreciate the stability that bonds offer. While they are generally a defensive asset and return slightly higher returns than term deposits, in other countries and other pension funds, they have big allocations to bonds. And one of the reasons for that is, unlike Australia, where we have defined contribution into our super schemes and the companies that invest on our behalf never make any obligation of any amount to return to us. In many other overseas countries, particularly Canada, where Jake's from, those superannuation companies commit to return perhaps 10 times annual earnings or a certain figure anyway. So they know that they have to have those funds available for those retirees when the time's due. And because of the consistency of bonds and that they have a lot of confidence in them, they would allocate quite highly to bonds. So the average allocation to bonds across 29 countries and all those different pension funds was actually 52%, huge. Something to think about if you're nearing or in retirement. One thing I'd just like to add. Jack Bogle's, in my opinion, up there with Warren Buffett, he's the fellow who started Vanguard who's the grandfather of indexing. One of his sayings was you own your age in defense. So in your 50s, 50% of your portfolios and bonds, when you're in your 60s, 60% and so on. So as the years progress, you've got more and more of your capital base in the defensive side of a portfolio. So in case of what's called sequencing risk, if you have a sudden correction, a major correction like the GFC, just as you're about to retire, it can really, really affect your overall lifestyle into retirement. So by owning your age, you're continuously putting more and more at the defense and less and less in the growth, the more aggressive side of things. That's great, thanks, Jake. Good point. The final point on this slide is that the good news is that the over the counter market is now available to individual investors from $10,000 parcels with a minimum $250,000 upfront spend from FIG. I should have explained that the institutional market, the minimum parcel size is usually $500,000. So we've taken that right down. We investigate which bonds can be made available in smaller parcels, and then we deliver that to our clients so they can have their own diversified bond portfolio. Now, one of the biggest myths with bonds is that you wouldn't buy a bond in a rising interest rate environment. Every time I read that, I think, right, this author doesn't exactly know about the bond market. It makes me take a step back because there are three types of bonds. So let me explain. The first is the fixed rate bond like that BHP fixed rate bond we talked about that must pay the coupon or the interest which is set out at first issue. So the BHP bonds at first issue were $100 US paying 6.75% coupon or interest rates and they must pay exactly half of that each half year until maturity. Now, of course, the only way changing conditions can be reflected in that bond is through the price of the bond. So the prices will move up and down and can be quite considerable with a fixed rate bond. So if you're in an environment where interest rates are going lower, the price of those bonds will rise and help cushion your portfolio against other more volatile asset classes. But in the reverse, if interest rates start to move higher, those fixed rate bond prices will start to come off. Now, a lot of the reason people talk about don't buy bonds in a rising interest rate environment is because they're mimicking commentary by US commentators, particularly about US government bonds which are paying about half a percent. Something, I mean, it's tiny at the moment and of course they are in a rising interest rate environment. So we wouldn't actually advocate US dollar bonds unless you're a very, very risk-averse investor. But some of the fixed rate bonds, some of the high-risk ones, still delivering very nice, high returns, short-dated, we still do quite like. So just to add some colour though. So with rising interest rate environments, they don't tend to affect your shorter-dated fixed pay. But if you bought yourself a 30-year US government bond that's going to pay a certain 3% like you're locking into a 3% for a long period. So that's where the rising interest rates will certainly hurt. But in the corporate bond space where we spend a lot of our time and effort in trying to find great investments for folks, typically there are three to seven year where you're more tied to the maturity coming up within that shorter time frame where it's not going to get too wild as far as price action concerns. Just typical methods you pointed out. It is. But the other reason it's typical myth is because there are two other types of bonds. And the next one, the floating rate bond is exactly as the name suggests. The interest paid to you goes up and down with economic cycles. So the way they work is at first issue, it's $100 face value. And the issuer says, we will pay 3%, a fixed 3% margin over a benchmark interest rate. And that benchmark interest rate is usually the bank bill swap rate, which changes daily. So at first issue, let's say the bank bill swap rate's 3% and the fixed margin over is 3%. So the bonds issue today, we know we're going to be paid 6% for the next quarter. So 6% divided by four will give you your interest rate for the next quarter. So roll forward 90 days, three months. We get paid our interest on that day. And the company then looks at where BBSW is. Now say it's gone down to 2.5%. So then the interest for the coming quarter is 2.5%, that BBSW rate plus the 3% fixed margin being 5.5%. And again, just divided by four to get the quarterly rate. I'm hoping you're all following me here. So in a rising interest rate environment, you might have a preference for floating rate bonds, which are going to naturally increase, overfits rate bonds. I actually think the floating rate bonds are really good for die-hard term deposit investors because you are just getting... Your rate is just being recalculated every 90 days. So if you can find a floating rate bond you like from a company you're comfortable with, you wouldn't then have to be searching for the best term deposit rates every quarter because your bond would naturally adjust its interest. Yeah, they're very much like variable rate mortgage. So as rates are going up or down, the amount of getting paid is going up and down with the cycle. Typically the moves are very highly correlated with the RBA. So what the central bank does with the interest rate. So if the central bank is raising interest rates, you're going to get paid more. If the central bank's decreasing interest rates, you've paid less. So they follow the cycle and very much, it works in theory very much like showing up to your bank every three months and mulling over your term deposit. And we're going to have a sample portfolio that will show the two of these types and we'll lead into inflation length as well. Exactly. One last thing on the floating rate bonds, the price of those bonds, because that interest is recalculating every quarter, it doesn't move around as much. So we would say it's much more capital stable. Something to think about in your overall mix. So the third type of bond is an inflation link bond. And these are the only 100% hedges to inflation or the consumer price index. Now there are two main types. The first is a capital index bond where the capital of the bond rises with inflation. So a good example here is a Sydney airport. There's two bonds there, 20-20 and a 20-30 bond. So let's take the 20-20 bond. It's been going for quite some time. Every quarter, inflation is added to the capital value of the bond and the capital value of the bond is now, it's about $142. So if Sydney airport had to repay investors for that 20-20 bond tomorrow, it would all, I was $142 instead of the $100 face value where it was originally issued at. So we think these bonds are really great if you're in accumulation phase, you haven't yet retired because they will add to your, they will grow your capital assuming inflation remains positive. The other thing with these bonds to note is that interest is smaller. It's about a 3% interest rate on these bonds. But that's calculated on the growing face value of the bond. So the 3% isn't calculated on $100, it's calculated on $142. So your interest income is actually also tied to inflation. Now, the other inflationing bond is totally different. So just clear your head for a minute, take a big breath. Okay, so with these bonds, you pay a lump sum to the company upfront and it returns you principal and interest on a quarterly basis that is tied to inflation. So they're very long dated, often like the other inflationing bonds. So, you know, can be 15, 20 years, 30 years even, but they guarantee you a base payment plus inflation for that whole period. So an example I like to talk about is the Melbourne Convention Centre down opposite the Crown Casino in Melbourne. It was a joint venture and the joint venture borrowed by issuing a bond, one of these index annuity bonds, and it used the funds to build the Convention Centre. It's now obviously built and it's in the second phase of the project where it's just cleaning and maintenance. So it does the cleaning and maintenance, but all the cash flows come from the Victorian State Government. So you can see there, it's a very low-risk bond, paying, there's a couple of maturity dates. There's a 33 for sure. So, you know, you're getting a 16 or 17 year guaranteed cash flow by the, it's called Melbourne Convention Centre, by then. Low risk, very appealing. I think the returns are still approaching 5%. Yeah, that's close to the 5%. So we use in all of our inflation bond models, we assume inflation runs at 2.5% because that's the reserve bank midpoint. They target 2% to 3%, so we just assume the midpoint. So if inflation runs at under that, your return will be less. But if it runs over, and I'm sure many of you will remember when interest rates were double digits, mortgage rates got to 17%, I think, at one point, maybe higher, you would get that income stream from those bonds. So I think, and I would always say this pretty well, if you're new to bonds, I think the inflation-linked bond area is a good place to start because so few people have that 100% hedge against inflation. We do have a couple of questions around the same thing. Yes. Wilkinson and Billy both asking a similar type of question about rising interest rate environment, and how will that affect the value of a bond? And as, I don't know if you want to handle this or... Are you going for it, Jack? So a couple of questions around the same vein, like will you lose value if interest rates are rising? Well, a bond will end back at $100. So it starts its life at $100, it ends at $100. Ultimately, where it goes in between the start and the end can be volatile. Normally they're not, but they can go up and down. Typical volatile is pretty boring and pretty benign, but they can go up and down between the start and the end. So a fixed rate bond will go down in value if interest rates are rising. And a floating rate bond doesn't really do much if rates are rising. So both Wilkinson and Billy both asked a similar question. Ultimately, you can imagine, you would want to lock in a fixed rate bond if you think that rates are going to drop. And if you think that rates are going to climb, you want to own more floating pay. Because a floating pay will pay you more. And a fixed rate, you would lock in, imagine a term deposit you could buy today at 6%. You would lock that in because rates you expect to stay sideways or lower than where they are right now. So it is possible to lose value unless you just hang on until the end. And that's where a lot of the corporate bonds, the typical bond portfolio has an average life, four to five years, and can of course be sold in between. But that maturity ending back at the original face value, the original amount you invested or the original $100 value always ends up back at that $100, except for the Sydney Airport 2020s or the inflate capital index bonds where in a rising inflationary environment, your value clons. So I hope that answers the question. So here's my favorite slide. I say this every presentation. I think anyone that's heard me present before, I think they get sick of hearing me say, this is my favorite, but it is. I think if you can understand this slide, you'll go a long way to understanding the asset class. So it's a simplified bank capital structure. So all companies have one of these as do the banks. And it tells liquidators or receivers the priority of payments in liquidation or wind up. Now, assuming assets are sold, this bank goes into a wind up. The first level or the first ladder must be repaid before any of the subsequent ladders or investors can get repaid. So depending where you sit on this structure with your investment is really important. The higher up you are, the lower the risk it is, but also you would expect the lower the returns are gonna be. The reverse is also true here that any losses applied in liquidation are from the bottom up. And you can see that shares sit on the lowest level. So they are the highest risk investments in this structure. And you would expect the highest returns. Now you can see on the left-hand side where the bonds sit, they sit at three different levels and fixed income actually sits at five different levels. So being a fixed income company, we deal in all of these five, although I have to say we do not deal in the listed hybrids and I'll explain why as we go along. But let's start at the top. Senior secured bonds or covered bonds that the banks issue can be fixed or floating, typically five years to maturity. A lot of certainty because they have a defined asset that secures their investment. So the banks have to set aside 8% of their mortgage loan pool. And of course, just like if you borrow to buy a house, they can't borrow the full value of that pool. They can only borrow a lesser than the value of the pool. But importantly, if any of the mortgages in that mortgage loan pool starts to fault, they're obliged to top it up. So very, very low risk bonds these are, often rated AAA the same as the Commonwealth government. Low risk for a very good reason. The next level term deposits, there is no defined maturity securing your term deposits. The bank gives you a guarantee to pay and at the moment the government gives a $250,000 guarantee per entity, per institution. There are many ADIs that are covered by the government guarantee. The next step down senior unsecured debt or senior unsecured bonds is where most bonds are issued and where we would tend to concentrate. So typically for a bank five years can be fixed, can be floating, the floating rate bonds pay quarterly, the fixed rate bonds pay half yearly, they're quite tradable and often quite defensive asset bank senior bonds. Now moving down the structure and you'll probably have already appreciated we've gone from secured to unsecured, the terms and conditions of the investments are changing. So we go down to subordinated debt or subordinated bonds and you'll see the first thing about that is it's a level lower on the structure. So you're taking higher risk because you will get repaid after the senior unsecured bond holders. So subordinated bonds typically have a longer term to maturity of 10 years for banks and they have what's known as a call date after five years. And that's when the bank has the option to repay investors but it is not obliged to. So in Australia and generally globally most banks repay at the five year mark. If they don't, what's happened, what's tended to happen is that the securities have repop priced higher and it's more expensive to the banks to issue into this subordinated debt market. So it's longer term to maturity, the longer the term to maturity, the greater the uncertainty with the company or the bank. So as an investor you expect to be paid more. Now there's another point I'm gonna talk about subordinated bonds but I'll come back to it. I'm gonna move now to the hybrids. So hybrids are a very complex asset class and the new bank file three hybrids have conversion dates or mandatory conversion dates to shares or cash but if for whatever reason the banks don't meet the conversion clauses those hybrids then become perpetual instruments. So the bank never has to repay them. You lose that feature of the bonds with the final maturity date where you must be repaid. The other thing about hybrids is that interest payments are known as non cumulative. They can actually be foregone, interest can be foregone. So there is no commitment to pay you interest. It can be not paid and foregone, never has to be made up and there are no harsh repercussions for the bank as there would be if any of the bonds failed to pay interest or principal at maturity. So there's another couple of clauses I wanna talk about hybrids just quickly. They're very, very complex. If you have them please get ahold of your prospectuses and read them. So one of them is it's a capital trigger clause. So APRA requires the banks to set aside capital in case something catastrophic happens. And the base level of the capital for hybrids is 5.125%. So if bank capital falls below 5.125%, the hybrids automatically convert to the shares and that is to protect the bank from having to seek help from the government or the taxpayer. But it also importantly protects the bond holders that sit higher up in the structure and the reason it happens and the reason it's the whole hybrids are devised is to be loss absorbing and to help protect the survivability of the bank. So I'm going back to that word I used earlier, survivability is really important. So the other thing with the hybrids, we've talked about that capital trigger clause, making them go to shares. There is another clause that applies to hybrids and the subordinated bonds and that is called non-viability. So APRA at their determination can decide ABC bank is non-viable. I mean, to me, that means it's not going to continue. It can't operate. Can you imagine if they make that determination what's happening in the market? If you're a shareholder, you're out of there. There's no way you're hanging around to see what happens. You're selling if you can at that point. But if that happens, if APRA makes that determination and there is nothing in the prospectus or the documentation to give analysts like myself any clue what that means, but both the sub-debt and the hybrids convert to shares. Very interestingly, this has never happened before and we don't know how long it's gonna take for those bonds and hybrids to convert to shares and you get your certificates in order to sell. So I think theoretically, you could actually be junior to the shareholders if that happened. So you may not have the chance to get out as quickly as the shareholders and you may be left holding their losses, if you like. All of it's designed, hybrids are designed to be loss-absorbing. I think many retail investors just don't understand that. They see the attractive rate, 6%, 5% CBA, NAB. Whilst we don't think any of them are going to default anytime soon, it's very important. And that is why we actually think hybrids are much more like shares now than they used to be like bonds or debt in the past and that's why they're called hybrids because then typically we're a mix of debt and equity and that's why at FIG we don't trade listed hybrids. So just summarizing this slide, you can see where you sit matters in terms of your risk and return in this structure. As an analyst, if I was looking for the highest return in every instance, I would theoretically only be buying the shares because that's where you should get the highest returns. But what I'm looking for is the best return given the risk. So, and at any particular point, it can be any one of those levels in the structure. Just on the slide, basically this is in the capital structures, who gets paid first, second, third, fourth, fifth and ultimately shares are at the bottom of that list. If things go bad and bond holder, these are legal debt obligations that have to be paid. So shares and hybrids are there to take the pain. They cut dividends, they issue more shares, they're issuing a lot of hybrids, that's for sure, to make sure that they can pay me the bond holder the legal debt obligations so that the bank or whatever company is a going concern. And that's the whole point of the Basel 3 since the GFC that they wanna make sure the banks don't fail because that's just no good for everybody. So more hybrids, more shares and the ability to cut the distributions or not pay principal on the hybrids or interest on the hybrids is part of the protections overall for the bank and it's a worldwide push. Different world than what it was 10 years ago. Sure is. So we have this slide now, which shows how the capital structure translates in the market. So we've taken a snapshot of the worst possible time. We do that on purpose because we think there's plenty of very optimistic people out there. It's helpful to look back and reflect what exactly happened during the GFC. So we take $100 and we invest it in December 07 and we invested in the major bank's senior debt. Now you can appreciate there's a whole lot of different bonds in there with different maturities. So we've made like a little index of bank's senior debt which is the green line. And then we look at the CBA pearls three, that's the pale blue line, the hybrid. And then we compare the CBA shares what happened over the period. Now we add back in interest payments and we also add back in franking to the shares to give an overall picture. Now you see the green line very gently, upward sloping, very consistent, no surprises. I think that really spells out what low risk bonds offer investors. The second line, the hybrid, you can see quite a bit more volatility there. And if you're a forced seller in about March 09, you would have lost about 30% of the value of your capital. That hybrid then recovers but this is actually an older style perpetual hybrid. So the total returns actually never catch the senior bank bonds. And finally the blue line which is the CBA shares and you can see quite a lot more overall volatility. Now forced sellers about January, February, 08 would have lost about 55% of the value of their capital at that point. So quite significant falls in a very stressed market. You see the shares then start to improve. It's lovely, upward sloping, almost catches the bonds about May 2010. But it actually takes, if you follow that blue line along, five years for the shares to catch the bonds and then they start to outperform which is what we would expect. So a couple of things here I just want to point out. To my mind, and I've been an analyst for many years now, I don't too many to talk about, but CBA, if I look at the ASX 200, CBA is the lowest risk company in my opinion. So here's what happens to the lowest risk company under a stressed event. That doesn't go towards any of the mining services, miners the higher risk of risk sectors. The other thing I think it totally explains why you need to hold different risk assets in your portfolio. While you hold low risk assets, while you hold the growth assets, because if at the point of the GFC you needed to access some capital, you could have sold your CBA bonds and been quite happy then to hold the other investments until they recovered. Now, I think if we get another major stressed event, it's going to take longer than a five-year term and I think you need to think about your portfolios in a longer time span than a five-year sort of recovery term because interest rates are so low amongst a whole lot of other measures. So just a couple of things to think about going forward. Have you got enough defensive assets in your portfolio? So the next slide, again, it's unfortunately finishes and we can't increase the lines or there's a certain time period here, but I think it's important to show, so UBS, the big Swiss bank, had a industry in Australia. It was called the UBS Composite Bond Index and this is a UBS slide. They tracked the performance of composite bonds versus the ASX200 from September 1989 right through to September 2013. So they invested $1,000 and then again added back in-companates to get overall returns. So the Pale Blue Line is a composite bond index and you can see for many years it outperforms and that's because during those years there was a high inflationary period and this particular index is about 70% government bonds was government bonds and government bonds really outperformed at that point. But you can see the consistency of that Pale Blue Line, a bit of a bump around about the GFC time where investors sold a lot of shares and fled to bonds, but you can see it's generally upward sloping. Now if we look at the line for the shares, underperforms initially, you get this lovely big up swing. I mean that's why we hold shares and myself and my colleagues, we would I think universally nearly all of us hold shares. So you get this lovely rise but then you get the sharp fall. It goes up, down, up, down, down, up, down, up. It's the volatility in that market compared to the consistency in the bonds and I'm just gonna click here again to have you my next little picture come up. Interestingly over that whole 24 year period, the composite bonds return 8.72%, less than half a percent less than the ASX 200 accumulation index of roundabout just over 9%. Exactly what my university lecturers told me, who would have thought that composite bonds with 70% waiting to government bonds could earn those sorts of returns compared to the shares? I think that's what's surprising. A lot of people are surprised if they're prepared to trade bonds, the returns they can get, the certainty that's on offer. And as we would call it Jake, the sleep at night asset class. You don't have to worry about too much about what's happening overnight. So on that note, I'm gonna hand over to Jake for the next slide and he's gonna talk you through a few bond examples. So here's a sample bond portfolio. Just for simplicity, we put one fixed pay, one floating pay and one inflation linked. It's not quite a third, a third, a third, but it's almost there. You've got about 30% in fixed, 30% in floating, the rest is in the inflation linked. So just a simple portfolio. Notably, it's 70% senior bonds are sitting at the top of that capital structure and a good mix of fixed floating inflation link because no one knows where the future goes. If you think that rates are gonna rise, you want more floating and inflation linked. If you think rates are gonna go down, you want more fixed pay, but this is just simply for a sample for you to get a taste of what's out there. Let's go through some of the names. SCT Logistics. Now this is the fourth largest train operator in Australia. It's a privately owned company. Probably it's very high quality, in my opinion. They do fast, fast, I don't know what the term was, but they basically transport alcohol, food for Nestle fosters, super retail groups and woollies across the southern corridor, across the Perth. I've been in operation since 1974. Still privately owned, very good company in my opinion. And on offer here at about five and three quarters percent. It's a senior bond, pays twice a year. That's very typical of a fixed pay bond, semi-annually paying. And this specific bond has a 7.65% fixed coupon. So 100,000 allocated to that senior position. And that's in the transport, of course, a sector. The next position in the portfolio is the Sun Corp. So it's an AAI. Sun Corp, I imagine most listeners would know, very large major insurance company here in Australia. And this is a floating pay and it's callable. This is where it's a subordinated debt. It's callable in 2022. And it has, of course, a maturity, longer data than that, but this is a floating pay. And it's offered it to us right now at about a 4.13% return. So a high, high quality investment-grade company. And we put 100,000 into this position as well. The inflation, like moving on to the Sydney Airport, you'd all be familiar with Sydney Airport or hopefully would be a very, very large infrastructure asset. They make a lot of money from their car parks. But this is an inflation-linked bond. And I get asked quite regularly, why would Sydney Airport have an inflation-linked bond? Their revenues are tied to inflation. So because their retail operations, the rent gets charged on a CPI basis or inflation-linked basis, the Sydney Airport wants to pay its debts in inflation-linked as well. So very attractive investment-grade position. This one matures in 2030. In my experience over the last six years, generally quite easy to sell. Right now we're having a bit of trouble buying, but I've got clients that are queued up and should get sorted soon. But can be bought and sold in $10,000 in quints. All three of these bonds can be. So those are the three bonds within the portfolio. The fixed pay, the SCT logistics, senior bond, SunCorp subsidiary, AAI, that's the floating pay. And then the inflation-linked Sydney Airport. So these all, based on the amount you'd spend right now, the capital that you'd spend, $341,000, the average yield to maturity, let's look at some of these portfolio statistics, the average yield to maturity is 5.23% on the portfolio. So a yield to maturity is the total return per year if you buy and hold these assets. So per year, if you just buy and hold these assets, never talk to us at FIG again, you earn 5.23% per year. So a yield to maturity is the yardstick. It's the way to compare a term deposit to a bond to another bond. It's the way to compare your total return per year you're expected to make off this portfolio. Looking underneath that, the weighted average income, that's a running yield. That's the percentage of cash flow. So very similar to, I guess, a dividend yield for a share. It gives you an idea of the expected percentage of cash flow from this portfolio. And in this case, you're gonna get paid a 4.89% cash flow from this specific portfolio. The weighted average term to maturity, now, so that's the way it does it sounds, a weighted average term of the overall portfolio. This is getting dragged out quite a bit by the Sydney Airport 2030 bond, which is the biggest position within this overall portfolio. So, and of course, all three of these positions can be bought and sold in $10,000 increments at, well, pretty quickly based on the assets I see here. So, you can buy and sell these assets at whenever you want. The average term on the Sydney Airport is a 2030 is dragging out the overall portfolio. Can I just add, Jake, with the buying and selling that if you bought $100,000 of SCT Logistics, you don't have to sell the whole $100,000. If you're looking for $10,000 to take a trip, cruise or something, you can sell down just a $10,000 part. It's not a total, very much like the shades, you can sell part. Correct. So, I do get approached quite regularly, especially in the financial year, people want to cash out or they need money to pay this, that or holidays or whatnot. I need $40,000 from my portfolio. I mean, I need a million dollars from my portfolio. I can sell them parts of the various positions or if I think a bond is treating expensive, I can pair it down on that one. So lots and lots of choices. So you work with your dealer to maximize your portfolio. All right, so hopefully you've gone on your screen, the expected projected cash flows from this specific portfolio. Now, one beauty of bonds is that you're gonna get your money back, assuming the company survives and you pay your cash flows. And it's very convenient to see when and where and how much you're gonna get from your portfolio. It's all there in black and white. You can find it on our website. You can see it anywhere you want. You can find the information from us. We can build portfolios that show you these projected cash flows so you can start planning. If you've got grandchildren, some folks like to buy the Sydney Airport 2030 so that the capital base will rise and they can see that when the kids need the money, where the capital base will be. So looking at the SCT logistics, just this is one year of distributions from this specific company. We invested $100,000. It pays you 7,650 per year. It does it twice a year. June and December are the payment dates, specifically June 24th and December 24th. It's a lovely Christmas Eve for our staff members to make sure that the payments are going up, but that's what has to happen. So you know you're gonna get paid the money. SCT logistics quality company, been around for 40 years and you're gonna get, in my opinion, that money's coming to you. Suncorp, same idea there. You get paid quarterly, which is very typical for floating pay, 1368 every quarter. So for the year, you're gonna get 5472. And the Sydney Airport, now this is where it's interesting and you can see that the first coming up quarter, you're gonna get 1,010 dollars. Then it rises to 1,016 and 1,023 and 1,029. And so for the year, you can collect $4,078, is what's projected for that one. But that is what typically occurs with capital index bonds. Your cash flow on a quarterly basis climbs as long as inflation's climbing. So quite attractive. And specifically that Sydney Airport, I think it's projected to end. We invested, do you mind turning back to the prior slide? Show on. We invested $127,800 for the face value of that specific bond. I think it's projected to end at about 181,000 thereabouts, assuming a two and a half percent inflation rate. So that Sydney Airport is a very attractive asset. It's a major infrastructure in this country and it's my opinion not going anywhere. So that thing's gonna raise your capital rates assuming inflation stays positive and your quarterly cash flows increase along the way with it. So attractive asset. So let's go back to those cash flows. So in this case, the total cash invested is $345,322. If you took notes from the prior slide, what we had there was $341,000 invested. That $341,000 was the face value. This total cash invested of $345,322 is the including accrued interest. So you're gonna get paid interest on this bond, but when we priced this portfolio May 30th, there was some interest that was built up. So whoever we were buying these bonds from earned their interest, you have to pay them. So what that translates to for investors that whether they're buying or selling, you never miss out on a day's interest. You're always gonna get paid. So if you own a bond for three weeks, three months, three years, 30 years, you're always gonna get paid the interest that you do. So it doesn't matter how long you hold or if you buy it and sell it very quickly, you're gonna get your capital of interest daily. So an attractive overall portfolio, total return for about 5.2%, a nice cash flow and it's 70% investment grade. So this is very, very high quality investment grade is a think of the top, I guess ASX top 50 type companies. Those would be investment grade. Typically anything under the top ASX 50 would be sub investment grade. So very high quality portfolio. And there was a question from Billy. I don't know if he's still in line. Billy was asking, I guess a couple of questions about commission and how to revenues get charged in the bond area. So here we go, let's get into it, the weeds. So the bond markets and foreign exchange markets charge in a very similar manner. It's the buy-sell spread. So if you go to the bank and you wanna buy a currency and they say it's a dollar 30, they're getting it at 129.90, they sell it at 130. And the same thing if you wanted to sell this currency back, they take little clips when you buy or sell. It's the same premise in the bond markets around the world and the foreign exchange markets around the world. There's little clips taken you buy or sell. So looking at this sample, the buy-sell spread, the bid price or where you can sell the bond, you come to me and say, hey, Jake, I need to sell this bond. I say it's bidding at 98.75. We're taking a little margin. If you want to buy that bond, it's at 100. So typically there is more commission applied to the buy side. And that's because quite often people will buy a bond and hold it for five years. So in this case where the bond is marked at 99, that means that essentially on your statement, you'll see that $99 price or valuation of 99 and we will add to that. And if you come to sell it, we subtract from that number. So in this case, there's a 99.200. That's a dollar commission, if you will, or 1% commission. If you will hold that bond for five years, 1% divided by five, that's 20 basis points a year. Compare that to something like an ETF or any managed fund out there. That's quite a low fee overall. And typically when you sell a bond, the commission is much, much tighter because it just naturally is, it's just not something that normally gets charged as often. It tends to be very, very tight. It's the buy side. And that's typical not only here in Australia, but like I said, in my career in Canada and trading US and Canadian debt over the years. The other way is the custody service fee. Now these bonds are held. We wanna make sure, my wife has quite a few bonds. I wanna make sure that these things are held safely. So we, well, JP Moran has a custody service. They're holding these bonds safely for us. And unfortunately, they're not doing that for free. They want to charge us to do so. So we put these fees on to our customers. That's 0.2 of a percent is what gets levied. So if you had a bond portfolio like the sample we had, you're earning about 5.23%. After that custody fee, it would be 5%. And that 0.2% is removed. So all those prices you saw on the sample portfolio included the spread, the bid offer spread. So whenever you come to us, you wanna buy a bond or you come to us, you wanna sell a bond, we're getting, it's already inclusive of any commissions that are applied. Other ways that we make money is through our new issues. We've issued about 36 bonds. So last few years, about 1.4 billion of issuance for 36 or so companies over the last several years. So these copies pay us separately. We also have about 8 billion in TDs. And again, we earn commission through the issuers. And we also have a managed income portfolio service where if you don't wanna deal with the vagaries of buying and selling or deciding whether you wanna buy City Airport or SCT, there's a professional portfolio manager that can do that on your behalf. So maybe we'll just touch a little bit on this on what figures most folks have already had a squeeze of our website. We are the largest fixed income specialist. And that's all we do. We're the experts on the defense. We're not here to wear the growth hat, the shares and the property. We're here to be the experts on the defense. And that's all we do, the term deposits, the cash and the bond space. We did pioneer the opening of the bond market here in Australia, the direct bond market previous to FIG really coming around. It was minimum $500,000 per bond, which of course excludes a lot of mums and dads and certainly me. So yeah, so over that time, we put on quite a few new clients. These are self-managed super funds, trusts, individuals, charities, councils. We deal with over 7,000 clients now. Maybe I'll just skip over and hand it over to Andrew. So one of the questions from Neville who asked how easy it is to open an SMSF. That ties in very nicely. Thank you for that question. Great introduction. Andy's just gonna talk through opening accounts though. Yeah, so thank you, Jake. Thank you, Liz. So should you wish to trade bonds or should you decide to trade bonds? And the client services team will work with you or to open an account. And in this section, what I'd like to talk to you about in the next few minutes is why you need to open an account because bonds transact and maintain differently to what you might be familiar with if you've dealt with shares before. The benefits and services that come with having a FIG account and also how to, the ways you can open an account with FIG. So first, opening an account with FIG gives you access to bonds. And you might say, well, okay, that's a pretty simple thing, but getting access to bonds has not always been easy for most investors in Australia. The reasons for that is, as Liz has mentioned before, corporate bonds or bonds generally working over the counter market. And the over the counter market is usually an area mainly for the big end of town. It's quite a closed network of institutional players who deal with bonds there. So that's not always accessible to most investors. Also, with the over counter market, frequently a lot of bonds have minimal parcel size of $500,000. This is, Liz and Jake as all for reference throughout the presentation so far. And also, and Jake touched on it, when you buy a bond, it needs to sit with a licensed custodian. And many licensed custodians are only interested in the big players and the big institutional investors and in many cases and charge a lot of money for that service. To give you an example, we know a lot of custodians out there that really, unless you have $100 million and you're getting $100,000 of fees out of you every year, they don't want to deal with you. So, one of the benefits of having a figure count and why you need one is, and what FIG brings to the table there is, FIG gives you access to the over counter market without needing a big institutional player. We can make the minimum parcel size as much, much smaller by having a figure count and FIG is also a licensed custodian. So we are able to hold the bonds on your behalf. Jake touched on JP Morgan. They are a sub custodian. They're one of our partners in managing this relationship. So what that means for you is when you hold bonds, you have direct ownership of that bond. It's yours in your own designated custody account. We are licensed custodian, which means we have obligations with assets, liquid assets and being able to support that. Also, should something happen to FIG, your bonds are yours. They're not part of FIG's balance sheet in any way. They're held completely separate to ensure protection of that, of your asset. I've touched on already that small parcel sizes are available to you and so has Jake and Liz, small as $10,000 for many bonds. You also get a value for money custody service. We will not be asking for hundreds of $1,000 in fees. Jake has touched on it at a 20 basis point. We do have a minimum fee that would be as small as $20 per month to hold custody account. As part of that service, you will receive monthly holding valuation, transaction income reporting. So the PDF will be emailed to those who specify on the account. It's quite a smart document that gives you a valuation of your current holdings, the transactions you've had in that period for that month and also the income that is being paid. Of course, there's also a custody invoice in that one. You will receive access to or you receive your own MyFig account and MyFig is an online portal where you can download coupon devices, which more or less income payments we've made to you. You can also download your contract notes, which also, in other words, if you make a transaction or buy or you sell a trade, you can access those 24-7. That will also be emailed to you. Sorry, just Jason had a question about the online access. It is actually quite good. You can put your performance reports, you can see your projections of cash flow, you can get all your statements. We also, of course, provide the end of financial year summaries of all the bookkeepers and accountants love. It's all available online and you can even look at bond pricing, it's updated daily. There was also a question prior about charts. There's a FIG app that you can download that you can find the charts there as well. So just tying in a few questions, sorry. That is perfect. It covers a couple of board points too. What MyFig has, you can also download all this data in Excel format. Sure, do you want to analyze it other ways? And of course, it covers off your, there are charts there to show your cash flow projections and portfolio breakdowns and the like. Another thing the FIG custody accounts gives you, it's a service we don't charge money for, but frequently we have a lot of clients who hold foreign denominated bonds, US, Euro and Great British Pound bonds. A lot of the clients want to transact though in AUD, so they pay AUD to purchase a bond and they want AUD back when they sell the bond and they may want their coupons or interest payments in Australian dollars. FIG can help you there. We also use Jack and Morgan to help us. There's no fee there, but certainly one of the things we like about the service, the spreads for the Forex service incredibly tight to your benefit. So that's also an option available too. So hopefully that excites you when you're ready to open an account and trade bonds. So that's the case. My team is ready to assist you through that process. Two ways you can do it. First, online. So if you go to fig.com.au, we have a wizard that will help you work your way through the application process. There are a few, we had to navigate intuitively to find the prompts to open up the online application process. So depending on what type of investor you are or what I mean by that is the entity type. If you're opening a personal account or a super fund account or it's for a company, corporate trustee or an individual trustee, this online website will guide you through the relevant questions for your entity type. So Jake mentioned there's one about how to open up an account for a self-managed super fund. The wizard will talk you through that. Managing, the reason for the application process, we've got online as well as you can do it by PDF, download the PDF document or your relationship manager can send that to you, which you can print off. Or if you come into the office, it will gladly help you walk you through the application process. We of course want to make this as easy as possible for those going through it. In many cases, probably the only amount of supporting documentation that we'll ask you for is for a copy of a recent bank statement. So we ensure that when we make payments, it goes to the right account and ensure that we've got the account name right. So in the case of if you're an individual investor or a self-managed super fund, if you complete the application form and supply a recent copy of a bank statement, that should be all you need. If you have a trust in the say of a family trust, then we'd also request a copy of a certified trust deed. So we hope concerning identity, we use electronic means so we can get your name, date of birth, and address and most of the time we can verify your identity through that method. And that really is the main steps you need to go through for an open account. So your relationship manager will help you with that or go to a website and onboard through that method. Thanks very much, Andy. Just a couple of things on that. Fig has offices in Perth, Melbourne, Sydney, Brisbane. We're hoping to open an Adelaide one soon, but we do have clients all over the country in the Northern Territory, in the far South, West of Western Australia, in Tasmania. All the staff, all of us travel and we cover those areas where there isn't an office. But being able to open an account online and transact online is a service that we offer. We wanna make it broadly available. So this, we're heading to the wards concluding the presentation. So if you have any questions now, please jot them down and I'll jump to Jake in a moment. But in terms of next steps, if you haven't already registered for the wire, our weekly newsletter, and it has its own dedicated website, amazing growth we've had in the traffic to that website. I think we're really well regarded by most of corporate Australia as the place to go to for fixed income research and news. I have a register and you'll get our weekly news that arrives on a Wednesday morning. Of course, think about opening an account. I meet enough people that say, well, Liz, I heard you last year or I heard you two years ago, Liz, when you were talking about those quanta spawns and no reason to delay, open an account and of course, start investing. But Jake, I'll hand to you, there are a couple of last questions we wanna run through. Yeah, actually, it's quite a few. Where do you start? Well, maybe I'll start with Janet's question just regarding just foreign currency, just maybe start with your chords. We do train a lot of US dollars, British pound, Euro, yen. We do trade a lot of different currencies. US dollar seems to be a lot more favored and we trade with New York, London. We've got trading partners, of course, all across Australia. Basically, we are here to find you the best pricing, whether if I get the best price out of New York, if I get the best price out of Sydney, that's where I'm gonna get the supply or demand from for you. Our job is, no, we're not aligned with anybody, we're here to just find the best pricing for the asset. So this morning, I bought quite a few bonds out of the US. This afternoon, I probably will pick some up out of Singapore and maybe some gets in demand out of Sydney or Melbourne, just other trading assets, whether it's the big format. So we're here to find the best pricing in many, many currencies. So hopefully, Janet, that covers off that question. Are there any others you'd like to highlight? Well, we'll get the dealers to, the leadership managers to reach out to them if they can to answer any very specific type of questions. There was one from Billy who asked, I'm used to trading shares and ETFs, indices and the effects. How different is trading bonds? You want to answer that one, you're the trader, Jack. Well, compared to shares, it tends to be a lot slower moving. It's, you know, I think Billy also had a question about charts, they tend to be quite boring. The charts that is in them, I guess. So our role is like finding sellers and buyers and matching them up. So it's not like there's any where we can go and we can see who wants to sell. So Jake might have a seller today of a half a million dollars of Sydney Airport. We then, first of all, go to our own internal dealers. Is there anyone looking for Sydney Airport 2030? Some may, some may not. We might generally be a seller of bonds. We were some years ago, I put out a sell order on some Lloyds Bank, Aussie Dollars, subordinated bonds and I think we've got about 95% of our clients out because at that same time, one of the, I think the HSBC had a buy order out in those bonds. So it's quite a fluid by-sell market. Our whole issue though at the moment is not having enough bonds to trade. People are buying and holding or wanting to get in. So it can take, it's more time to try and buy at the moment than to sell, so. Yeah, so I do the questions and there are, I can see questions about liquidity. Generally speaking with any asset class, whether it's shares or property or bonds or any asset class, liquidity depends on the price. So if your house isn't selling, you've got to lower the price to get it done. If I need to move a bond faster, I just drop the price by 10 cents, 15 cents until I can find a buyer on the Sydney airport. We're actually looking for some Sydney airport. If we can't find it internally within FIG, we're looking with ANZ, UBS, Macquarie, Deutsche Bank and then overseas in Singapore and Hong Kong, they seem to trade a lot of Sydney airport as well. So we have quite a few counterparties in Singapore and Hong Kong that seem to trade it. And a few in Europe, specifically Switzerland and London and New York, the Northern, Northern Hemisphere is not going to be trading Sydney airport as much as the Southern Hemisphere would. But we're here to find the best pricing. So if I can't find the best pricing within FIG clients or domestically, then we tap on the shoulder of somebody in Singapore, see if they're looking to sell some and at what level. So we're here trying to find the best pricing for you. The difference between share markets and many other markets is that the centralized exchange. There are some centralization of bond markets and foreign exchange on Bloomberg and Reuters terminals, but it is still a dealer to dealer network for both asset classes. Okay, I think we're going to wrap it up there. Thank you very much, Gerard, for listening in and telling us that you've learned a lot, even though you've been a client for six years at FIG. I'm delighted to see that comment. So thank you very much for that. If you are interested or have other people that you think might be interested, certainly refer them to the FIG website, just FIG.com.au or the wire website, which is just type in FIG, the wire and it will come up. You can start reading there, you can sign up. We do have a lot of educational material available. We have a 300 page guidebook, which if you haven't already got a copy, you can request. Really, we're here to help. We want to expand the asset class where all firm believers in it and that it should be part of your portfolio. So on a final note, thank you very much for joining us. We hope you've learned something. Feel free to recommend the company or what we do to your friends or our websites. Thank you very much, Jayak and Andy, for joining us. Fantastic to have you both here this morning. Thank you to all our listeners as well. Thank you for joining us. Please give us a call if it can help in any way. We hope you have a good day. This now concludes the presentation.