RMBS fund delivers income and growth

RMBS/investment-management/investment-manager/

6 June 2016
| By Anonymous (not verified) |
image
image image
expand image

A residential mortgage backed security (RMBS) fund has delivered a total return of 6.77 per cent per annum plus a distribution of 6.09 per cent, dwarfing rates offered by traditional cash products as rate hit record lows, according to Firstmac.

Firstmac said the fund did well as it bought investment grade assets called RMBS, which were made up of loans secured against people's homes.

Firstmac chief financial officer, James Austin, said the strong returns from the ‘high livez fund' showed that RMBS offered a solution to the low interest rate problem, which reduced retirees' living standards.

The fund started in 2011 and was still the only fund in Australia that offered ordinary investors access to RMBS, Austin said.

"In a property obsessed nation, variable-rate home mortgages are one of the largest assets classes and offer many benefits for investors, including relatively low volatility and reliable income. So, it's a travesty that these assets are being left to the banks, while ordinary investors are stuck with high-risk shares or term deposits paying less than three per cent", Austin added.

Austin added that as property prices were rising around Australia, it also increasingly protected the collateral value of the RMBS.

The ‘high livez' fund holds RMBS from highly rated institutions, including Westpac, AMP, the Commonwealth Bank and Suncorp. It also owned a stake in 52,000 Australian mortgages around Australia, according to Firstmac.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 2 weeks ago

The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call....

3 days 6 hours ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

2 weeks 4 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

4 weeks ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5