The Fund delivered +0.93% in August, 14.73% over 12 months and 14.92% annualised since inception, continuing to deliver over 10% net return above the RBA cash rate.
Income Timing and Distribution Profile
We have recently received a few questions around the variability of monthly cash distributions. Unlike more commoditised strategies, transactions within the Fund often have bespoke interest payment schedules - monthly, quarterly, or otherwise negotiated. Where income is not received monthly, it is accrued into the Fund’s unit price. Once the cash is received, it is distributed in the following month’s distribution, and the accrued component of the unit price correspondingly falls. As the Fund is a fully distributing income trust, this ensures investors always receive the full amount of income generated. Importantly, this approach is simply accrual accounting and is entirely distinct from capitalised interest structures seen in areas such as construction finance.
Monthly Performance Drivers
Two existing lenders drew on their facilities during August, reflecting the continued depth of portfolio activity. Performance during the month was slightly softer than average, reflecting a lender prepaying a portion of interest. While this timing adjustment slightly reduced August’s reported return, it has no impact on the overall income profile of the Fund.
Market Backdrop
Credit spreads in public securitisation markets remain toward the tighter end of recent ranges, underpinned by consistent issuance and strong participation from bank balance sheets, offshore investors, and credit funds. While this depth of capital has compressed returns in public markets, we continue to target less intermediated transactions where pricing is more reflective of structural risk and investor protections.
Positioning
Our approach remains deliberately selective, prioritising quality of structure over speed of deployment. Cash levels in the Fund remain very low, enhancing portfolio returns, and we continue to manage inflows on a tightly controlled basis.
The Fund remains closed to new and existing investors.
