A professionally managed income portfolio designed to actively manage ASX-listed hybrids and income securities, while progressively incorporating broader institutional credit exposure as the Australian income market evolves.
The Sandstone Income SMA aims to deliver regular income and capital stability through disciplined, investment-grade exposure to ASX-listed hybrids, with flexibility to allocate to corporate and government bonds, convertible notes, managed funds and ETFs as opportunities arise.
Designed for investors seeking professional management of hybrid portfolios and reinvestment risk as the Australian income market transitions.
Investors seeking professionally managed income exposure through ASX listed hybrids and subordinated debt securities, including opportunities arising from the market's transition away from AT1 bank hybrids.
The Portfolio combines MST's experience in Australian hybrids and income securities with a disciplined framework for portfolio construction, relative value and reinvestment management.
Key features:
- Active management of listed hybrid and income securities
- Relative value trading across bank, insurer, corporate and listed credit securities
- Management of reinvestment and liquidity risk
- Portfolio transition framework as bank hybrids progressively roll off
- Ability to incorporate broader MST income OTC debt portfolio management capabilities over time
- Adviser-friendly managed account structure with full transparency and reporting
The Australian listed hybrid market is entering a structural transition as major bank AT1 securities are progressively phased out. For many investors, this creates a reinvestment challenge: how to maintain income, diversification and liquidity as traditional bank hybrid opportunities decline. Today → ~$36bn (as at 30 June 2026) listed bank hybrids outstanding. Transition → progressive maturities, active reinvestment and relative value management. Future → broader diversified listed and institutional income portfolio.
Active management of reinvestment and portfolio transition risk as listed bank hybrids progressively roll off.
The Sandstone Income SMA is designed to help manage this transition by actively balancing existing hybrid exposure with broader income opportunities, including selected non-bank hybrids, listed income securities and institutional-style credit exposures where appropriate.
An investment in the Sandstone Income SMA is subject to market risk, credit risk, capital risk, liquidity risk, interest rate risk, concentration risk, subordinated debt risk, regulatory risk and the risks associated with managed account investing. Investors should read the relevant disclosure documents and seek advice before investing.
Equity Trustees Limited ("Equity Trustees") (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the MST Monthly Income Fund ("the Fund"). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).
This information has been prepared by MST Financial Services Pty Ltd (ABN. 54 617 475 180, AFSL 500557) ("MST") and does not constitute financial advice and is provided for information purposes only. In preparing this information, we did not take into account your objectives, financial situation or needs. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Please also note that nothing in this communication constitutes an offer or invitation to invest in any financial product, and any such investment should not be considered before first reading all applicable disclosure documents including the Product Disclosure Statement and Target Market Determination. Neither MST, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance.
Target Market Determination
The Fund's Target Market Determination is available www.mstfinancial.com.au/tmd A Target Market Determination is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.
* The SQM rating contained is issued by SQM Research Pty Ltd ABN 93 122 592 036. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to change at any time. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme. For full Disclaimer, please visit: https://sqmresearch.com.au/funds/disclaimer.php
** The report that included the rating was published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec) on 25th February 2026 . Lonsec receives a fee from fund managers for the preparation of reports. The report / rating is general advice only. An investor should be aware that: a) the advice has been prepared without taking into account an investors’ objectives, financial situation or needs; b) an investor should consider the appropriateness of the advice having regard to their own objectives, financial situation or needs before acting on the advice; and c) an investor should obtain a PDS relating to the product, consider the PDS and seek independent financial advice before making any decision about whether to acquire the product. The rating is not a recommendation to purchase, sell or hold any product. Past performance is not a reliable indicator of future performance. Ratings are prepared based on information available at the time of preparation and may be subject to change by Lonsec without notice. Visit lonsec.com.au for important documents (FSG, Conflicts Statement). © 2026 Lonsec. All rights reserved.