You can rest assured that Australian Unity mortgage funds:
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only invest in
first registered Australian mortgages and cash - with no exposure to low doc, no doc and sub-prime loans |
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continue to receive consistent income and a high level of capital stability |
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are managed according to stringent arrears and default management processes |
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are diversified at a number of levels including by sector, interest rate type, geographic location and loan size. |
About
the Fund
The Fund is
a traditional style mortgage trust, which pools investors’
money together to lend to borrowers. It has a portfolio of
loans, each secured by first registered mortgages over the
properties of the borrowers.
The Fund aims to provide investors with regular and stable
income, together with a high level of capital stability. The
Fund is designed to spread exposure and reduce risk through
diversification by geographic location, loan size, interest
rate type, and loan maturity profile.
Managed by our award-winning team, the Fund has consistently
achieved high ratings by independent research houses. The
team has a reputation for well-defined risk constraints, an
excellent arrears record, and sound management of cash
levels.
Who is
the investment manager?
The Fund’s investment manager is Australian Unity
Funds Management Limited.
What
does the Fund invest in?
The Fund primarily invests in a portfolio of
loans secured by first registered mortgages over quality
retail, commercial, investment residential, and industrial
property.
The Fund typically holds 60-90% of its assets in first
registered mortgages. The balance of the Fund’s assets is
held in cash and similar investments.
What is the Fund’s investment
process?
The investment manager maintains a core exposure to a
diversified portfolio of registered first mortgages that
provide consistent income and security of credit quality.
Some of the key elements of the current criteria used in the
selection of quality mortgages include:
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loans will be limited to no more than 70% of an independent
market valuation of the property securing the loan (at the time
of investment); |
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no single mortgage to generally exceed more than 5% of the Fund’s
net assets; |
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loans will generally be made on income producing property where
annual net rents are not less than 80% of annual interest payments; |
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if part or all of a loan is secured over owner occupied property,
borrowers must demonstrate strong repayment ability, and |
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specialised securities may be considered where the loan to
valuation ratio does not exceed 70% and where no single loan amount exceeds 1% of Fund size. |
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Australian Unity Mortgage Income Trust - Retail Units |
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APIR Code |
AUS0020AU |
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Inception date |
February
1998 |
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Minimum Initial Investment |
$1,000 |
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Minimum Additional Investment |
$500 |
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Minimum Regular Saving Plan |
$100
per month |
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Entry/Contribution Fee |
Nil |
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Minimum Withdrawal Amount |
$1,000 |
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Exit/Withdrawal Fee |
1.10% within the first 12 months |
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Management Costs |
1.30%pa |
|
Buy/Sell Spread |
Buy:
Nil Sell: Nil |
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Income Distributions |
Monthly |
Credit and risk management
Loans on property will only be advanced against the security
of a registered first mortgage. Stringent protocols,
procedures and processes have been put in place to manage
market risk, investment risk and credit risk.
Three separate committees oversee the management of the
Funds:
The Investment Committee is responsible for the overall
investment strategy of the Fund.
A Credit Committee oversees the Fund’s credit strategy,
which includes monitoring credit risk and loan approvals
where applicable. This committee is also responsible for
setting credit policies and procedures, and for approving
loans that exceed pre-determined levels.
The Asset Management Committee is charged with
overseeing the management of delinquent loans to further
reduce any risk of loss to investors where this is
applicable.
Portfolio diversification
A stringent set of diversification benchmarks have been
developed ensuring that prudent levels of diversification
are achieved. Exposure to individual borrowers is also
monitored and controlled by maximum exposure limits.
Geographic maximums are also applied NSW/ACT 60%, VIC/TAS
50%, QLD/NT 30%, WA 20% & SA 10%.
The portfolio is continually monitored against general
credit and property markets to determine its
appropriateness.
Lending process
Loan terms can range between 1 and 5 years. Loans for 5 years are
reviewed at the 3-year mark.
The following provides a brief overview of the lending and mortgage
management process employed:
1. Initial analysis and portfolio suitability
2. Information gathering and evaluation
3. Credit analysis
4. Reviews and recommendations
Arrears and default management
In the event that a borrower goes into default there is a
process to remedy the default as quickly as possible. In
cases where the borrower is unable to remedy the default the
Fund will take immediate action to take possession of the
security property in order to recover the loan amount
outstanding. Third party service providers will also assist
in the recovery process.
Derivatives
It is not the investment managers current policy to use
derivatives for gearing purposes or for speculative
activities for this Fund. However, the investment manager
may use derivatives for implementation of interest rate risk
strategies and management of the Fund’s interest rate
exposures.
More
information
The Fund’s performance and unit prices are available to view
and download at:
www.australianunityinvestments.com.au/mit
Important information
This investment product is issued by Australian Unity Funds
Management Limited ABN 60 071 497 115, AFS Licence No
234454. This information is intended only to provide a broad
summary of this financial product. Investment decisions
should not be made upon the basis of its past performance or
distribution rate, since future returns will vary. You
should refer to the current Product Disclosure Statement if
you wish to know more about this product. The information
provided here was current at the time of publication only. |
