Performance

Firstmac’s expertise in Residential Mortgage-Backed Securities has seen over $20 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 January 2018


The High Livez fund achieved a distribution for the month of January of an annualised 4.51% which represented a margin of 3.01% above the official cash rate.

This result was particularly pleasing given that the fund is currently holding liquid assets, including cash, in excess of 20% of funds under management.

Cash and liquid assets have a lower return and will therefore dampen distribution returns, meaning the other portion of the portfolio achieved extremely strong performance.

The Unit Price declined slightly from $1.053 on 31 December 2017 to $1.052 on 31 January 2018.

The Unit Price reflects the revaluation of underlying fund investments and will move up and down with market movements.

The fund’s primary objective is to return a regular monthly distribution to investors.

The Investment Committee does not target capital gains although these may arise from time to time. As an example, the fund listed at a Unit Price of $1.000 at inception seven years ago and this has since increased to $1.052.

The Unit Price has remained quite stable over the past two years and has priced within a narrow range reflecting the relatively conservative nature of our investments and a stable market backdrop over this period. This is reflected in the following graph:


 

The Total Return for the past six years was 6.13% per annum consisting of 5.39% Distribution Return and 0.75% Growth Return.

At the time of writing this report, 9th February 2018, equity markets have been experiencing increased volatility with the Dow Jones in particular recording some significant drops.

Observers are stating that this reflects a long overdue correction in inflated stock markets. To date, there has been no bearing on credit markets with RMBS (Residential Mortgage Backed Securities) trading at higher prices.

As an example, on Thursday 8th February 2018, the NAB priced a new RMBS deal for $2.0 billion with the Senior Class pricing at margin of 0.85% above 1 month Bank Bills reflecting the best pricing in over three years.

As a result, volatile stock markets have had no impact on our fund’s unit price.
 


 

# inception date was 29 March 2011.


Australian Economic Update

The RBA left its cash rate unchanged at 1.50% at its early December 2017 policy meeting and the accompanying statement made it clear that the RBA sees no pressing need to change the cash rate in the near term.

No rate change is expected at the imminent February monetary policy meeting. The RBA’s quarterly Monetary Policy Statement due three days after the February policy meeting is likely to show no significant changes to the RBA’s 2018 and 2019 economic growth and inflation forecasts, which are for annual GDP growth to lift slowly through 2018 pushing above long-term trend in 2019 with annual inflation moving from under the RBA’s target band of 2-3% through 2018 towards mid-target in 2019.

Australian Credit Markets

Risky assets largely traded flat for January, with the Australian Itraxx closing the month at 57 bps. The Australian Itraxx is the cost to take credit risk insurance on 25 investment-grade Australian companies. As well as being flat, the index remains at 11 year lows.

Australian banks have been active capitalising on the current tight credit spreads, issuing $17 billion of bonds this year. The recent issue margin of 77 basis points on an ANZ 5-year floating rate senior debt issue is the lowest margin on major bank wholesale debt issuance since the ANZ 5-year issue at a margin of 75 basis points in October 2007.

Historical performance assumptions

*Total return for the 6 years to 31 January 2018 and 6.43% 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


 

Firstmac Financial Statement 2017

 

Firstmac High Livez Additional Investments

 

Firstmac High Livez SQM Report 2017

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 January 2018 and 6.43% 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.