Money Management - Nov 2022

Does your investment portfolio benefit from rising rates?

When the Reserve Bank of Australia raises the Official Cash Rate, we often see increased volatility in equities and fixed income markets. For an income-seeking investor, this is problematic.

Fortunately, there is an asset class that seeks to provide low capital volatility and higher investment income in a rising rate environment – Private Debt.

The Metrics Direct Income Fund (Fund) targets a return of 3.25% p.a.¹ (net of fees) above the RBA Cash Rate² (currently 5.85% p.a.).

So, if interest rates rise, investment returns from the Fund should also rise.

RBA Cash Rate
2 October 2002 – 4 October 2022

RBA Cash Rate from 2nd Oct 2022 to 22nd Oct 2022

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Metrics Direct Income Fund

The Fund provides investors with monthly income from the interest and fees charged to borrowers from its holding of corporate loans.

Features:

Target return of 3.25% p.a¹ above the RBA Cash Rate² (currently 5.85%)
Diversified portfolio of ~290 loans across a range of industries
Experienced and active management team
Monthly liquidity (where the Fund is liquid)³
Management fee c. 0.58% p.a.⁴
Minimum initial investment $1,000⁵

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Target return is a target only and may not be achieved.
RBA Cash Rate currently 260bps p.a. as at 4 October 2022. Neither the Investment Manager or the Responsible Entity guarantees the performance of the Fund or the return of investor's capital.
Where the Fund is liquid, the Responsible Entity will typically accept redemption requests monthly, at the end of each month, with 10 business days prior written notice. In certain circumstances redemptions may be restricted. Please refer to the PDS for more information.
Excluding impact of performance fees.
Direct Investors only. Minimum investment via platform may vary, refer to IDPS operator requirements.

Key Risks

Credit risk is one of the risks within a portfolio of private loan assets. We address this risk by:

Undertaking a detailed and thorough risk assessment of all borrowers we lend to and complete rigorous due diligence prior to committing capital.
Ensuring there is a sufficient equity buffer within the loan agreements to absorb any decline in the financial performance and valuation of a company.
Employing highly skilled investment professionals with experience in corporate restructuring that can act swiftly to preserve value for our investors should a workout or corporate restructure be required.

To keep up to date with opportunities in the Australian private debt market, follow us on LinkedIn or visit our website today.

Disclaimer

Equity Trustees Limited (Equity Trustees) ABN 46‌ 004‌ 031‌ 298‌ | AFSL 240975‌, is the Responsible Entity for the Metrics Direct Income Fund ARSN 641‌ 620‌ 331‌ (the Fund). Equity Trustees is a subsidiary of EQT Holdings Limited ABN 22‌ 607‌ 797‌ 615‌, a publicly listed company on the Australian Securities Exchange (ASX: EQT). The Investment Manager for the Fund is Metrics Credit Partners Pty Ltd (Metrics) ABN 27‌ 150‌ 646‌ 996‌ | AFSL 416‌ 146‌. The information provided is issued by Equity Trustees and has been prepared to provide you with general information only. In preparing this information, Equity Trustees did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Equity Trustees, Metrics nor any of their related parties, their employees or directors, provide any warranty of currency, accuracy, completeness or reliability in relation to such information or accept any liability to any person who relies on it. Neither Equity Trustees nor Metrics guarantees repayment of capital or any particular rate of return from the Fund. All opinions and estimates included in this website constitute judgments of Metrics as at the date of website creation and are subject to change without notice. Past performance should not be taken as an indicator of future performance.

You should obtain and carefully consider in their entirety the current Product Disclosure Statement, Target Market Determination and any updated information and continuous disclosure notices before making an investment decision in respect of the Fund and assess whether the Fund is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

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