Performance

Firstmac’s expertise in Residential Mortgage-Backed Securities has seen over $24 billion in RMBS issued since 2003. High Livez gives everyday investors access to this market, which is usually restricted to institutional investors.

Coronavirus related market volatility

As you are no doubt aware, equity markets have been volatile in recent days due to fears about the economic impact of the coronavirus, together with falling oil prices.

While we are all concerned about the economic impact of the coronavirus, we would like to assure you that the fund’s portfolio, comprising Residential Mortgage-Backed Securities (RMBS) and term deposits, is a relative safe haven in times of economic uncertainty.

Unlike equities, which are exposed to the profitability of corporations, RMBS receives income from residential mortgage repayments of households. As such our RMBS investments are predominately linked to the performance of the Australian economy as a whole. Our fund’s performance is not linked to any individual financial institution or corporation.

This means that the income you receive from the fund, whilst not risk-free, is more secure than most other forms of investment while being much higher paying than a term deposit.

Despite the recent share market volatility, our investments have remained stable with little price movement to date. Delinquencies on our underlying residential mortgage pools remain at historic lows which is consistent with low unemployment rates in Australia at this time.

Move to more defensive asset allocation


During the first week of March, prior to the recent coronavirus-driven market volatility, our Investment Committee opted to sell some large holdings of AA-rated RMBS at good prices. This transaction leaves the fund very well positioned as our fund now holds surplus liquidity. We will continue to monitor the market for investment opportunities.

Fund performance to 29 February 2020

The official RBA Cash Rate has fallen once again, with the RBA cutting the overnight rate from 0.75% to 0.50% in early March.

This will ultimately have a flow on to our High Livez fund return as our investments are floating rate bonds that reset monthly at a fixed margin above the cash rate.

They key objective for our investment committee is to provide a consistent margin above the official cash rate so as to provide regular, dependable monthly distributions.

Our funds unit price was relatively stable over the month of February, increasing slightly. The Unit Price increased from 1.0538 to 1.0541.

During the month our fund produced a Distribution Return of 3.64% on an annualised basis.

The Total Return for the past 8 years was 5.60% per annum, consisting of 5.02% Distribution Return and 0.58% Growth Return.

Delinquency and Default rates across the fund’s underlying residential mortgage exposure remain very low by historical standards. The Investment Committee is pleased with the performance of investments held.




Australian Economic Update

Australian economic indicators released in February were again strong on balance but their impact on financial markets was overshadowed by downside risks to the economy from the coronavirus. Returning to the economic readings, housing indicators continued to strengthen with December owner-occupier home loan commitments up 3.5% month-on-month marking the seventh consecutive monthly increase. Q4 real retail sales rose 0.5% quarter-on-quarter, the strongest gain in a year. January employment growth (up 13,500 with full-time positions up 46,200) was stronger than expected although a rising participation rate caused the unemployment rate to lift to 5.3%.

Australian Credit Markets

Credit markets sold off with other risk assets during February as concerns of a coronavirus pandemic increased, however, compared to the equity markets, the move in credit was quite muted. The Australian iTraxx moved 16.5 basis points wider over the month. Similarly, the credit spreads on subordinated bank paper traded around 15 basis points wider. For a 5 year bond, this translates into a move lower in price of roughly 60 basis points or 0.6%. Listed Tier 1 Bank paper was weaker than subordinated back debt, falling 1% to 2% in price terms. However, it was no comparison to the decline in the equities markets with the ASX200 falling by more than 8% over the month, including a weekly fall at the end of February of 10%.

Historical performance assumptions

*Total return for the 8 years to 29 February 2020 and 5.87% 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 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 downloads

 

Direct Debit Request


 

Eureka Report


 

Financial Services Guide


 

Firstmac and RMBS


 

High Livez Financial Statement 2019

 

Firstmac High Livez Additional Investments

 

Firstmac High Livez SQM Report 2020

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

 

Change of Compliance Plan Auditor
 

 

Change of External Dispute Resolution Scheme membership

 

Firstmac High Livez Notice of Change to PDS
 


 
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*Total return for the 8 years to 29 February 2020 and 5.87% 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.