MST launches hybrid transition strategy

Mike Taylor

Managing Editor and Publisher

2 June 2026

MST Financial has launched a new investment framework which it says is designed to help advisers and investors navigate the structural phase-out of listed hybrids in the evolving income landscape.

It said the new MST Hybrid Transition Strategy, combined the actively managed Sandstone Income Separately Managed Account (SMA) with the ability to allocate to the MST Monthly Income Fund (MIF), “creating a broader and more flexible income framework spanning both ASX-listed and institutional OTC credit markets.

The announcement said launch of the product is timely with the first major bank hybrid call date approaching in mid-June and the Australian Prudential Regulation Authority’s (APRA’s) planned removal of Additional Tier 1 bank hybrids.

It said the APRA move was expected to trigger one of the largest reinvestment cycles in the Australian retail income market with more than $38 billion of listed bank hybrids expected to progressively roll off over coming years.

MST said the strategy was developed in response to the structural evolution occurring across Australian income markets, where investors are increasingly seeking broader and more actively managed income solutions capable of accessing opportunities beyond the ASX-listed hybrid market.

The firm believes the next generation of income portfolios is likely to become more diversified, more institutional and more dynamic in nature, with active allocation across listed hybrids, OTC credit, institutional floating-rate securities and future capital market opportunities becoming increasingly important as the market evolves.

Commenting on the launch, MST Financial chief executive, Gerard Satur said the launch reflects the firm’s broader strategy of building institutional-quality investment capabilities for the evolving needs of Australian wealth management.

“Australian income investing is undergoing one of its most significant structural transitions in decades,” said Satur.

“By combining listed market expertise with institutional fixed income capabilities, MST is building a differentiated platform designed to help advisers and investors navigate the next phase of the income market.”