Performance

Firstmac’s expertise in Residential Mortgage Backed Securities has seen over $16 billion in RMBS issued since 2003. High Livez gives everyday investors access to this market, which is usually restricted to institutional investors.

Fund performance to 31 July 2017


The High Livez fund delivered an annualised return of 3.83% for the month of July, which represents a margin of 2.33% above the official cash rate.

The fund once again generated strong earnings against a backdrop of record-low interest rates that have presented investors with a serious income challenge.

Although strong, the result for July was lower than the prior month because in June, capital gains had been realised on the sale of some investments.

These sales also resulted in a period of the fund holding higher cash balances which have since been re-invested in new opportunities.

We expect that these new investments will generate higher returns for the month of August.

High Livez provides a return from investment in floating rate bonds, comprising a fixed margin over the monthly bank bills rate. This means the fund’s distribution will therefore increase if bank bill rates increase. Bank bill rates are typically a small margin above the official cash rate.

During July, our fund’s unit price increased slightly to 1.0524. The strong result brought the Total Return for the last 6 years to 6.42% per annum, comprising of 0.71% of capital growth and 5.71% of distribution.
 


 

# inception date was 29 March 2011.


Australian Credit Markets

Domestic credit outperformed equities for the month of July. While equities were largely flat on the month and exhibited ‘choppy’ price volatility, credit traded tighter. The Australian Itraxx Index started the month at 83.4 basis points and ended at 77.1 basis points. It is now trading at its tightest level in nearly 10 years. During the month, ANZ announced the long-awaited calling of its ASX-listed tier 1 note, ANZPC, which continues the historical precedent of all domestic banks calling their notes at the first call date. Continuing the theme from last month, primary issued bonds continued to remain well supported with final pricing tighter than the initial price talk which feed into tighter pricing for RMBS product.

Australian Economic Update

The RBA left its cash rate unchanged at 1.50% at its early August policy meeting. The statement accompanying the no rate change decision plus the quarterly Monetary Policy Statement issued a few days later showed that the RBA still expects the economy to gather pace slowly through this year and push above long term trend growth from mid-2018. The RBA also expects inflation to lift and stay in 2-3% target range from late 2018. These forecasts imply that the RBA will want the cash rate closer to what it deems to be the neutral cash rate, assessed at around 3.50% in the minutes of the July RBA Board meeting, by the end of 2018. However, in practice, given extremely high household debt and continuing Australian dollar strength, the cash rate target for end-2018 is probably at least 100bps less, around 2.50%. Much will depend on whether economic data readings cause the RBA to maintain its firm economic growth and inflation forecasts.

Historical performance assumptions

*Total return for the 6 years to 31 July 2017 and 6.59% p.a. since inception on 29 March 2011. The total return is the trust’s consolidated performance over the period referenced. Past performance is not indicative of future performance and should not be the only factor considered when selecting an investment. Performance is calculated on an initial investment for $10,000 with distributions reinvested. Ongoing fees and expended have been applied however individual taxes are excluded. This information is general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider obtaining financial advice prior to making an investment decision.

High Livez downloads

 

Direct Debit Request


 

Eureka Report


 

Financial Services Guide


 

Firstmac and RMBS


 

Firstmac Financial Statement 2016

 

Firstmac High Livez Additional Investments

SQM Research provides independent assessment in managed funds to AFSL holders and their authorised representatives. SQM requires that you must be an AFSL holder or authorised representative to view this research.

      
 

Highlivez Performance Factsheet

 

Notice of change to the Constitution

*Total return for the 6 years to 31 July 2017 and 6.59% p.a. since inception on 29 March 2011. The total return is the trust’s consolidated performance over the period referenced. Past performance is not indicative of future performance and should not be the only factor considered when selecting an investment. Performance is calculated on an initial investment of $10,000 with distributions reinvested. Ongoing fees and expenses have been applied however individual taxes are excluded. This information is general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider obtaining financial advice prior to making an investment decision.

High Livez is issued by Perpetual Trust Services Limited ("Perpetual") ACN 000 142 049 AFSL 236648 as the Responsible Entity of the Trust. The Investment Manager is Firstmac Limited ("Firstmac") ACN 094 145 963 AFSL 290600. Firstmac High Livez and the Product Disclosure Statement (PDS) is available at www.firstmac.com.au or by contacting Firstmac on 13 12 20. The information in this document is general information only and does not take into account any person's situation, financial objectives or needs. You should read the PDS in its entirety before making any decision to invest. Perpetual and Firstmac strongly recommend you obtain independent professional financial advice on the risks and suitability of this product. The value of your investment in High Livez could go down as well as up. Past performance is not a reliable indicator of future performance. Restrictions may apply to the amount and timing of withdrawal requests - refer to the PDS for full details.