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Australian Unity High Yield Mortgage Trust

Due to the continuing extreme volatility in global financial markets this product has been placed on hold.
 
Australian Unity High Yield Mortgage Trust
Rebate na
Minimum Investment $1,000
Investment Term CLOSED
Research Lonsec Recommended
S&P Standard & Poor’s has high conviction that the manager will consistently generate risk-adjusted fund returns in excess of relevant investment objectives and relative to peers.
Investorweb Buy
   
pdf download Product Disclosure Statement
pdf download Performance Summary
pdf download Rate Update
   

You can rest assured that Australian Unity mortgage funds:
 
only invest in first registered Australian mortgages and cash - with no exposure to low doc, no doc and sub-prime loans
continue to receive consistent income and a high level of capital stability
are managed according to stringent arrears and default management processes
are diversified at a number of levels including by sector, interest rate type, geographic location and loan size.

About the Fund
The High Yield Mortgage Trust builds upon the successful structure of our more traditional Mortgage Income Trust by including specialised loans and some construction and development loans, or by lending a greater amount, in order to boost returns.

The Fund aims to provide investors with attractive levels of income, together with capital stability.

Our talented and respected team of mortgage managers have a reputation for well-defined risk constraints, an excellent arrears record and sound management of cash levels.

The Fund is designed to spread exposure and reduce risk through diversification by geographic location, loan size, interest rate type, and loan maturity profile.

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 also invests in specialised loans, construction and development loans, vacant land and other income producing assets.

The Fund typically holds 60-95% 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?
Key elements of the current criteria used in the selection of quality mortgages include:
The Fund may hold up to 95% of its assets in registered first mortgages;
No single loan will generally exceed the greater of $15 million or 5% of the Fund’s net assets;
The Fund will be able to advance loans up to a maximum 85% of Loan to Valuation Ratio (LVR). LVR is based on the valuation amount as advised by an Independent Registered Valuer;
If part or all of a loan is secured over owner occupied property, borrowers must demonstrate a strong repayment ability;
Construction and development loans must demonstrate an adequate level of pre-sales or lease commitments.
 
Australian Unity High Yield Mortgage Trust - Retail Units
APIR Code AUS0003AU
Inception date March 2005
Minimum Initial Investment $1,000
Minimum Additional Investment $500
Minimum Regular Saving Plan $100 per month
Entry/Contribution Fee Nil
Minimum Withdrawal Amount $1,000
Exit/Withdrawal Fee 1.10% within the first 12 months
Management Costs 1.70%pa
Buy/Sell Spread Buy: Nil Sell: Nil
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 6 months and 5 years. Loans for 5 years are reviewed at the 3-year mark.

The following provides an 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/hymt

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.

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