The Fund delivered +0.67% in September, 14.36% over 12 months and 14.74% annualised since inception, continuing to deliver over 10% net return above the RBA cash rate.
Income Recognition and Distribution Timing
September saw a significant increase in interest income across the portfolio, largely reflecting the timing of interest payments from several transactions. A major contributor was a quarterly paying asset that distributed its full interest for the period, along with the first payment from a new investment funded in July.
Where transactions do not pay interest monthly, the Fund accrues interest into the unit price until the cash is received. Once received, that income is distributed to investors in the following month’s distribution, and the accrued component of the unit price correspondingly falls. As a fully distributing income trust, this approach ensures investors always receive the full net amount of income generated. Importantly, this is standard accrual accounting - it simply reflects the timing of cash flows - and is entirely distinct from capitalised interest structures, such as those used in construction or development finance, where interest compounds into the loan balance rather than being realised and distributed to investors.
Monthly Performance Drivers
Performance during September was modestly softer, at +0.67%, due to a one-off adjustment relating to the clean-up of a small tail of legacy whole loans purchased several years ago. This accounted for approximately 40 basis points of performance impact and represents routine portfolio housekeeping rather than any change to the underlying income profile.
Offsetting this, one existing lender drew on their facility during the month, reflecting the continued depth of portfolio activity and the strong origination momentum across the Fund’s core counterparties.
Market Observations
Broader credit markets have remained stable through September, with spreads largely range bound and issuance activity healthy across both public and private segments. While public securitisation spreads remain tight, we continue to observe selective repricing in private transactions as lenders seek more flexible funding structures. This divergence between flow driven public markets and negotiated private deals continues to favour the Fund’s mandate, where structural depth and customisation drive returns rather than scale or liquidity.
Portfolio Positioning
The Fund remains near fully invested, with very low cash levels enhancing portfolio efficiency. We continue to manage inflows carefully to preserve this position and maintain flexibility to fund existing lender commitments. The current environment continues to reward credit discipline and strong counterparty relationships, both of which remain central to how the Fund is managed.
The Fund remains closed to new and existing investors.
