SMSF trustees are increasingly being drawn to the high yield and liquidity prospects of Firstmac’s residential mortgage-backed securities (RMBS) investment fund, according to the non-bank lender.
Speaking to SMSF Adviser, Firstmac chief financial officer James Austin said SMSF investors looking for diversified investment options are attracted to the fund’s exposure to residential mortgages.
“It provides that good credit and low default, but in a bond form rather than a straight mortgage fund because it adds that price of liquidity, which is not there for mortgage funds,” Mr Austin said.
The High Livez investment fund recently celebrated its third birthday, posting a three-year total return of 8.37 per cent.
Mr Austin said the return was above those of comparable products, such as Macquarie Income Opportunities, which returned 4.71 percent, and Perennial Tactical Income at 5.13 percent.
“We have consistently achieved beyond our target of three percent above the cash rate and that is testament to the fund’s ability to analyse the credits and find the returns,” he said.
“This fund concentrates on one asset only, a bond fund backed by Australian home loans, not multiple credits so it fits very well into a diversified portfolio and that has broad appeal to SMSFs.”
In addition to retail investors via SMSFs, the fund relies on financial advisers, who are becoming increasingly relevant as the fund matures.
“Advisers do look to see the track record of the fund,” Mr Austin said.
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