The Manning Credit Opportunities Fund delivered +1.07% in August 2026, bringing net returns to 13.29% over 12 months, 14.58% per annum over three years and 14.53% per annum since inception in July 2022.
The Fund targets the RBA cash rate plus 10% per annum over rolling five years. Over three years the Fund exceeded the cash rate by 10.46% per annum, and by 9.34% over the past 12 months.
Returns are inclusive of distributions, net of fees and exclude tax. Past performance is not a reliable indicator of future performance.
The Origins of the Strategy
The Credit Opportunities Fund began somewhat differently to a conventional fund launch. Before MCOF existed, we had identified and invested in a number of individual credit opportunities that sat outside the natural mandate of the Manning Monthly Income Fund. These were typically finite, more complex transactions where the underlying credit was attractive, but the structure or circumstances allowed us to negotiate returns above those available in more conventional parts of the market.
Initially, these investments were made available individually to a small number of longstanding Manning clients. As the opportunity set developed, the Fund was established in 2022 to bring these transactions together within a dedicated strategy.
That history remains relevant to how MCOF is managed today. The Fund was not established around a target level of assets under management and then tasked with finding investments to fill it. It has spent much of its life closed, with additional capital raised selectively as suitable opportunities emerge. That approach is particularly important for a strategy targeting a return of RBA Cash +10% per annum, where excess capital sitting in cash can dilute the economics of the portfolio.
Getting Paid More for Risk
At its simplest, the objective of MCOF is not to take more risk in order to generate a higher return. We have a defined risk appetite and seek opportunities where the Fund can be paid more for risks we are prepared to accept.
That distinction is important. There will be periods when capital is abundant, competition is high and the additional return available for taking a particular credit risk is simply not sufficient. At other times, liquidity becomes less readily available, funding requirements change or particular parts of the market become dislocated. The underlying risk may not have changed to the same extent as the price available for providing capital.
It is in those circumstances that the Fund's mandate becomes particularly relevant. A transaction that did not meet our return requirements six months earlier may become attractive at a different price, with stronger structural protections or on better commercial terms. Equally, a higher headline return does not make an opportunity suitable if achieving it requires moving outside our risk appetite.
An Opportunities Fund
MCOF is intended to have the flexibility to invest when particular opportunities present, rather than maintain a predetermined allocation to individual segments of the credit market.
We remain cognisant of the economic outlook and the potential for a more challenging environment to affect underlying borrowers and asset performance. That does not mean changing the Fund's risk appetite in anticipation of higher returns. Rather, it means maintaining that risk appetite and being positioned to deploy when changing liquidity conditions, funding pressures or market dislocation create unusually attractive pricing or structures for risks we already understand and are comfortable underwriting.
Periods of uncertainty will not make every transaction more attractive. In many cases they will make us more cautious. However, they can also create exactly the type of finite, less conventional opportunities for which MCOF was originally established.
