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 March 2018


The High Livez distribution for the month of March was a solid 4.50% on an annualised basis. This has been relatively stable for the past three months.

It represents a distribution margin of 3.00% above the official cash rate, which is particularly pleasing when most fixed income investments are offering record-low yields.

The Australian Bank Bill rate has been rising consistently over the past four months, replicating the trend in the United States’ short-term funding markets.

This rising trend has continued into April. The one month bank bill rate is now close to 0.35% above the official cash rate compared with a long run average of 0.12%.

This increased spread of over 0.20% represents additional margin for our fund’s investments as all bond holdings reset monthly over the one month bank bill rate.

It is anticipated that banks may soon reprice mortgages to recoup some of this increased cost.

The Unit Price was relatively unchanged at 1.051. This unit price has remained quite stable in recent times as reflected in the following chart:



The High Livez fund has now been operating for seven years. The Total Return over this period was 6.33% per annum consisting of 5.67% of distribution returns and 0.67% of capital growth. The Investment Committee targets consistent distribution returns, with stable capital. The annual growth of 0.67%, while welcome, is incidental and not targeted.
 


 

# inception date was 29 March 2011.


Australian Economic Update

Australian engineering construction spending has been very strong, especially down the East Coast of Australia. Export sales of goods are trending upwards and export sales of services are lifting very strongly. Australian growth has been sufficiently strong to deliver more than 3% y-o-y growth in jobs, a trend that looks set to continue and eventually drive up wages growth and probably inflation (still hovering around 2% y-o-y) too.

However, housing appears to be slowing and may start to detract from economic growth. This patchy picture of Australian growth and inflation prospects seems consistent with the RBA’s economic forecasts and will probably allow the RBA to leave the cash rate unchanged at 1.50% for a few more months yet.

Australian Credit Markets

Risk assets were sold off in March, a trend which was largely caused by trade war talk between the US and China and the effect this had of weakening global demand. Australian equity markets were down 3.8% and credit markets widened although the move was somewhat muted with the Australian iTraxx index only a couple of basis points wider.

Some parts of the Australian credit markets, however, did underperform. In particular, the move in listed Tier 1 securities has been pronounced. During the month, the newest WBC Tier 1 deal, which was issued at a price of $100.0 in mid-March, traded as low as $95.50 at the end of March. The negative price performance owes to pricing the deal too tight relative to secondary market securities.

Historical performance assumptions

*Total return for the 7 years to 31 March 2018 and 6.38% 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 2018

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 7 years to 31 March 2018 and 6.38% 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.