Perpetual reopens applications on mortgage funds

Perpetual has re-opened applications to its mortgage funds in response to client demand.

The company announced late yesterday that it had re-opened applications for its Monthly Income Fund, Wholesale Monthly Income Fund and Private Investor Mortgage Fund.

The three funds represent Perpetual’s largest mortgage funds with combined assets of $1.7 billion under management.

The company suspended applications and introduced a quarterly redemption facility for all its Monthly Income and Mortgage Funds (funds) on October 23. It said the change had been in response to the recently introduced guarantee on bank deposits, which had prompted a sharp increase in redemptions from mortgage funds across the industry.

Perpetual’s group executive income and multi-sector, Richard Brandweiner, said the company was re-opening applications to the funds at the request of a number of clients.

“Current market conditions are particularly favourable for mortgage funds, which tend to outperform cash alternatives in falling interest rate environments,” he said.

“The recent sharp reductions in the RBA cash rate and falling term deposit rates make high grade mortgage funds very attractive.”

Brandweiner said the new withdrawal facility gives more control over liquidity in the funds.

“It helps us manage redemptions in a manner that does not put at risk investors income or capital,” he said.

“Importantly, this approach creates a level playing that looks after all investors equally.”