Investors looking for investment opportunities providing monthly cash income, may want to consider the Aura High Yield SME Fund or the Aura Core Income Fund. This is particularly suitable for investors who wish to source monthly income with lower volatility of returns.
The Aura High Yield SME Fund is a wholesale only offering with a minimum initial investment of $100,000, whilst the recently launched Aura Core Income Fund is a retail offering with a minimum initial investment of $25,000.
The latter fund often invests in the same loans as its big brother. However, it is less risky being further up the capital stack. For this benefit of reduced risk, its average interest payment is expected to be a little lower, averaging around the Reserve Bank of Australia’s official cash rate plus 3.5 to 5.5 per cent per annum.
To illustrate this capital stack concept, the 30-day arrears in October 2022 was extremely low for the Aura Core Income Fund at sub 0.50 per cent, whilst the Aura High Yield SME Fund stood at 1.38 per cent, still below its calendar year to date average.
For the month of October 2022, the Aura High Yield SME Fund delivered a cash return of 0.70 per cent, 8.27 per cent for the year, 8.59 per cent per annum for the three years and 9.56 per cent per annum since it was launched 5 years and 3 months ago. These figures are after all expenses and assume reinvestment of the monthly income payments.
With the exception of the recent bounce in equities markets, these returns are significantly better than virtually every share-market index, whilst also offering the benefit of lower volatility and monthly cash payments (to date).
Brett Craig, and the team at Aura Credit Holdings, have positioned the portfolio, with around one-third of the loans consistently exposed to the rural sector, at a time when the prices paid for land, grains and livestock have been exceptional. There is a real focus on the maintenance of a high-quality loan book that provides investors with exposure to the best quality loans, irrespective of market conditions.
Meanwhile, the non-rural side of the Australian economy, according to the recent NAB business survey, is becoming wary of what the future economic conditions hold. It is expected that consumption will begin to materially soften in 2023, when the full effect of recent interest rate hikes, coupled with increased cost of living pressures, are widely felt.
If you would like to learn more about the Aura Core Income Fund, please visit the fund’s web page to learn more: Aura Core Income Fund
If you would like to learn more about the Aura High Yield SME Fund (wholesale clients only), please visit the fund’s web page to learn more: Aura High Yield SME Fund
You should read the relevant Product Disclosure Statement (PDS) or Information Memorandum (IM) before deciding to acquire any investment products.
Past performance is not an indicator of future performance. Returns are not guaranteed and so the value of an investment may rise or fall.
This information is provided by Montgomery Investment Management Pty Ltd (ACN 139 161 701 | AFSL 354564) (Montgomery) as authorised distributor of the Aura Core Income Fund (ARSN 658 462 652) (Fund). As authorised distributor, Montgomery is entitled to earn distribution fees paid by the investment manager and, subject to certain conditions being met, may be issued equity in the investment manager or entities associated with the investment manager.
The Aura Core Income Fund (ARSN 658 462 652)(Fund) is issued by One Managed Investment Funds Limited (ACN 117 400 987 | AFSL 297042) (OMIFL) as responsible entity for the Fund. Aura Credit Holdings Pty Ltd (ACN 656 261 200) (ACH) is the investment manager of the Fund and operates as a Corporate Authorised Representative (CAR 1297296) of Aura Capital Pty Ltd (ACN 143 700 887 | AFSL 366230).
You should obtain and carefully consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the Aura Core Income Fund before making any decision about whether to acquire or continue to hold an interest in the Fund. Applications for units in the Fund can only be made through a valid paper or online application form accompanying the PDS. The PDS, TMD, continuous disclosure notices and relevant application form may be obtained from www.oneinvestment.com.au/auracoreincomefund or from Montgomery.
The Aura High Yield SME Fund is an unregistered managed investment scheme for wholesale clients only and is issued under an Information Memorandum by Aura Funds Management Pty Ltd (ABN 96 607 158 814, Authorised Representative No. 1233893 of Aura Capital Pty Ltd AFSL No. 366 230, ABN 48 143 700 887).
Any financial product advice given is of a general nature only. The information has been provided without taking into account the investment objectives, financial situation or needs of any particular investor. Therefore, before acting on the information contained in this report you should seek professional advice and consider whether the information is appropriate in light of your objectives, financial situation and needs.
Montgomery, ACH and OMIFL do not guarantee the performance of the Fund, the repayment of any capital or any rate of return. Investing in any financial product is subject to investment risk including possible loss. Past performance is not a reliable indicator of future performance. Information in this report may be based on information provided by third parties that may not have been verified.