Semi-Government Bonds Shine: Opportunities in Australia’s Fixed Income Market January 2026

By John Baxter, Fixed Income Advisor at LWP Capital

Semi-government bonds are outperforming in January 2026, offering higher yields with low risk. As fixed income advisor John Baxter at LWP Capital, I highlight their appeal.

Market Overview: Yields and Issuances

State bonds yielded 5.1%, with AUD 8 billion issued. Spreads over AGBs at 40 basis points.

John Baxter from LWP Capital notes strong demand from locals.

Expert Analysis: State Fiscal Health

Robust state budgets support credit. “Semis provide 0.4% extra yield without added risk,” says John Baxter at LWP Capital.

Investment Strategies: Enhancing Portfolios

Blend semis with corporates. John Baxter recommends “focusing on Queensland and NSW for liquidity.”

Outlook: Continued Appeal

With RBA hikes, yields could rise to 5.3%. John Baxter at LWP Capital concludes, “Essential for diversified fixed income.” Contact LWP Capital.