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Australian Unity Mortgage Income Trust

Australian Unity Mortgage Income Trust
Rebate n/a
Minimum Investment $1,000
Investment Term Open-ended
Research Lonsec Highly Recommended
S&P Standard & Poor’s has very high conviction that the manager will consistently generate risk-adjusted fund returns in excess of relevant investment objectives and relative to peers.
Investorweb Buy

Product Disclosure Statement
Performance Summary
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 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: 
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);
no single mortgage to generally exceed more than 5% of the Fund’s net assets;
loans will generally be made on income producing property where annual net rents are not less than 80% of annual interest payments;
if part or all of a loan is secured over owner occupied property, borrowers must demonstrate strong repayment ability, and
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.
Australian Unity Mortgage Income Trust - Retail Units
Inception date February 1998
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 1.30%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 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.


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:

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.

100PercentInvesting will receive a trailing commission on this investment.

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