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 August 2017


The High Livez fund delivered an annualised return of 4.09% for the month of August, which represents a margin of 2.59% above the official cash rate.

The strong earnings, which were slightly up from the previous month’s annualised return of 3.83%, again demonstrate the fund’s ability to generate reliable income against a backdrop of record-low interest rates.

Firstmac, which manages the fund, has recently been active in global RMBS markets and we note that conditions remain very buoyant with strong demand for Australian RMBS. This provides positive and firm support for the investments held by our fund.

As you would be aware, High Livez owns a diversified portfolio of investment-grade Residential Mortgage Backed Securities (RMBS) from some of Australia’s most highly-rated financial institutions including Westpac, AMP, National Australia Bank, the Commonwealth Bank, and Suncorp.

The Total Return for the past 6 years was 6.41% per annum consisting of distribution return of 5.65% and capital growth of 0.76%.

The fund’s Unit Price in August was unchanged from the previous month at $1.0524.
 


 

# inception date was 29 March 2011.


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 and RBA Governor Lowe’s testimony to the House Economics Committee, all indicated that the RBA expects the economy to gather pace slowly through this year before pushing above long-term trend growth from mid-2018. The RBA also expects inflation to lift and stay in the 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. 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, at around 2.50%.

Australian Credit Markets

The Australian credit markets continue to grind tighter, in spread and yield terms, reflecting the greater and greater demand for fixed income credit products offering a certain spread over low yielding term deposits.

The Australian iTraxx, which represents the risk premium attached to Australian investment grade corporate bonds, traded as low as 0.67 per cent at the end of August. This is the lowest level it’s been since the Global Financial Crisis (GFC) although it is still significantly higher than the pre-GFC lows of 0.25 per cent.

Adding to the supply demand imbalance within the domestic credit markets has been a series of maturities within the ASX-listed bond market. The ASX-listed Caltex bond is another security set to mature in September which will result in money being redeployed into other fixed-income credit products.

Historical performance assumptions

*Total return for the 6 years to 31 August 2017 and 6.56% 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 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 August 2017 and 6.56% 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.