The Manning Credit Opportunities Fund delivered +1.07% in September 2026, bringing net returns to 13.74% over 12 months, 14.57% per annum over three years and 14.51% 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 10.44% per annum, and by 9.70% 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.
Portfolio Activity
Three existing non-bank lenders drew on their facilities during September, reflecting continued activity across the portfolio.
Changing Market Pricing
September saw a further adjustment in credit markets, with higher interest rates, widening spreads across parts of the public ABS and RMBS markets and more selective funding conditions.
These developments have implications beyond the immediate repricing of publicly traded securities. Public market spreads provide an important reference point for wholesale funding costs, and changes in those costs can influence the terms available in privately negotiated transactions.
For MCOF, the relevance lies in how these movements affect relative value. When funding becomes more expensive or less readily available, the return available on a particular transaction may increase without a corresponding change in the underlying credit characteristics. Equally, wider margins can reflect a genuine increase in risk, particularly where the economic outlook is deteriorating.
The distinction is important. A transaction offering a higher return is not necessarily a better investment. The question is whether the additional return reflects a change in funding conditions, a change in underlying risk, or some combination of the two.
Assessing risk through the cycle
This distinction becomes particularly relevant when assessing new opportunities. Our stress testing of new facilities is not limited to how a transaction is expected to perform under prevailing economic conditions. We also consider how the underlying assets and funding structure would respond to less favourable outcomes.
Depending on the asset class, this includes assessing the sensitivity of borrower repayments to higher interest rates, potential increases in arrears and defaults, changes in collateral values and the capacity of the transaction structure to absorb deterioration in underlying performance.
Importantly, these risks do not necessarily move together. Higher interest rates may place pressure on some borrowers while having relatively little impact on others. Similarly, a reduction in market liquidity may affect a non-bank lender’s funding options without materially changing the performance of its existing loan portfolio.
Understanding these differences is central to determining whether a change in pricing represents an attractive opportunity or simply compensation for a higher level of risk.
For MCOF, the objective is to identify transactions where the prospective return remains compelling after allowing for a range of plausible outcomes, rather than relying on a favourable economic forecast to justify the investment.
The Fund remains closed to new and existing investors.
