Minimum initial investment: $100,000 – Wholesale Clients



Your opportunity to invest in the Aura High Yield SME Fund. A track record of attractive and reliable monthly income from a large diversified portfolio of small to medium enterprise loans

Scroll

Overview

Investment Strategy

The Aura High Yield SME Fund aims to provide attractive and reliable monthly income with target returns of 9%-12% per annum from a broadly diversified portfolio of loans to small and medium-sized businesses (SMEs) in Australia. The Fund invests in a select group of online lenders across various industries, providing a layer of diversification regarding the loans' characteristics in the portfolio and the borrower industry. By carefully analysing the merits of businesses requiring short term loans, deep due diligence can reduce risk while offering an attractive income yield. Since its inception, there has been no loss of capital in the Fund.

Four hundred individual loans to SME businesses represent the majority (80%) of the portfolio. The average loan size is around $18,830 with an average term of 3-6 months. The remaining 20% is invested in a portfolio of over 10,000 SME loans. This generally means any single borrower defaulting should have a negligible impact on the overall portfolio return.

Why Invest

  • Reliable monthly income with target returns of 9%-12% per annum – making it an attractive solution for low-interest rates and low yielding term deposits.
  • Strong risk-adjusted returns. Since its inception in August 2017, the Fund has provided a 9.59% p.a. net return to investors in monthly income payments for 61 months.
  • It aims to perform through the economic cycle. The SME loan asset class has proven its ability to deliver reliable income to investors through disruptive market conditions.
  • Protection against inflation because returns are earned from the interest generally charged at a floating rate above the RBA cash rate.
  • Low volatility and little correlation to public markets and therefore a complement to equities and property as the underlying Fund assets are SME loans.

Fund Profile

Number of loans 10,034 SME borrowers via seven lending platforms
Style Income
Benchmark RBA Cash rate plus 5%
Fund fact sheet Download

Montgomery Investment Management has a Distribution Partnership with Aura Funds Management, a subsidiary of Aura Group.

Investment Manager

Investment Manager: Aura Funds Management

Brett Craig is both Portfolio Manager and a Director of Aura Funds Management

Founded in Australia in 2009, Aura Group has more than 1.3 billion under advice and management as of August 2022, employs over 100 staff across the Asia-Pacific region and is privately owned by staff members and strategic investors.


WEBINAR

In this presentation Portfolio Manager Brett Craig introduced private credit as an emerging asset class for investors seeking reliable income. The Fund’s proven track record of capital preservation, even throughout periods of asset price volatility, highlights the key role private credit can play in an investor’s portfolio. You can watch the recording here.

About the fund See all videos

 

In this video Brett Craig explains the emergence of SME debt capital as an emerging asset class for investors seeking income and returns that have little to no correlation with public markets. Whilst SMEs in Australia continue to make a significant contribution to the economy, they have not been well supported by the banking sector.

 

In this video Brett Craig explains how well-diversified the Aura High Yield Fund is, lending to 7,858 SME borrowers via five lending platforms and across various industries. The Agricultural sector currently accounts for 36 per cent of the loan book. The average duration is four months, and the longest loan is 36 months.

RATINGS

The Aura High Yield SME Fund has been graded by Foresight Analytics as Very Strong. This is a current rating and was issued in February 2022.

The Aura High Yield SME fund has received a Commended rating from Evergreen Ratings. This is a current rating and was issued in November 2021.

Performance

Comparative Returns Since Inception to 31/08/2022 (After all fees)

From its inception in August 2017 to July 2022, the Aura High Yield SME Fund has consistently outperformed its benchmark, delivering a compound annual return of 9.59%; after expenses and assuming reinvestment of distributions.

PERFORMANCE CHART
LATEST UNIT PRICE
FUND PERFORMANCE
INCOME DISTRIBUTION
[["Date","AHYSMEF - Cash Dist.","AHYSMEF Value - Dist. Reinvested","RBA Cash Rate - Dist. Reinvested","Benchmark - Dist. Reinvested","S&P Australia High Yield Corporate Bond Index","ASX 200 (Adjusted Close)"],["Jul-17",100000,100000,100000,100000,100000,100000],["Aug-17",100839.6,100839.6,100127.4,100552.05,100570.78,99893.37],["Sep-17",101712.7,101720.03,100250.84,101089.25,101079.86,99318.26],["Oct-17",102622.7,102645.68,100378.56,101647.32,101532.37,103293.36],["Nov-17",103516.2,103562.82,100502.31,102190.37,102005.45,104357.93],["Dec-17",104443.8,104523.47,100630.35,102754.51,102545.38,106022.1],["Jan-18",105374.3,105496.06,100758.55,103321.77,103270.43,105543.13],["Feb-18",106217.5,106385.6,100874.49,103836.97,103733.22,105163.79],["Mar-18",107146.9,107374.35,101003,104410.2,103980.05,100678.25],["Apr-18",108006.9,108297.77,101127.53,104968.01,104391.42,104581.69],["May-18",108924.9,109291.95,101256.36,105547.49,104617.68,105092.12],["Jun-18",109804.9,110253.71,101381.2,106111.38,105157.61,108285.85],["Jul-18",110714.9,111257.02,101510.35,106697.17,106844.24,109782.19],["Aug-18",111614.9,112258.34,101639.68,107286.2,107816.12,110469.18],["Sep-18",112489.3,113239.92,101764.99,107859.37,108428.04,108513.09],["Oct-18",113389.3,114259.08,101894.63,108454.81,108823.98,101917.63],["Nov-18",114251.3,115244,102020.25,109034.23,109554.17,99066.53],["Dec-18",115151.3,116281.19,102150.23,109636.16,110320.36,98702.93],["Jan-19",115971.3,117234.7,102280.36,110241.41,110778.01,102518.97],["Feb-19",116761.3,118160.85,102398.05,110791.11,111616.19,107838.34],["Mar-19",117606.7,119159.78,102528.51,111402.73,112809.17,108042.87],["Apr-19",118396.7,120101.15,102654.91,111997.9,113883.89,110574.07],["May-19",119236.7,121110,102785.69,112616.19,114588.37,111822.18],["Jun-19",120064.74,122112.83,102891.29,113194.7,116789.22,115701.15],["Jul-19",120814.74,123028.68,102978.68,113771.52,118275.31,119088.91],["Aug-19",121556.6,123941.38,103066.14,114351.29,119062.07,115445.94],["Sep-19",122297.6,124859.79,103150.85,114915.22,120645.86,116916.05],["Oct-19",123077.6,125833.69,103216.56,115476.41,120532.73,116480.79],["Nov-19",123801.42,126744.5,103280.19,116022.16,119087.78,119672.76],["Dec-19",124521.42,127657.06,103345.97,116588.76,119206.05,116842.64],["Jan-20",125251.42,128588.96,103411.8,117158.13,120321.9,122665.46],["Feb-20",125981.42,129527.66,103471.3,117674.91,119941.38,112596.58],["Mar-20",126731.42,130499.12,103493.27,118199.61,111744.74,88745.94],["Apr-20",127451.42,131438.71,103514.54,118709.65,83380.47,96535.33],["May-20",128181.42,132398.21,103536.52,119238.96,83159.36,100613.57],["Jun-20",128901.42,133351.48,103557.79,119753.49,83210.78,103099.33],["Jul-20",129645.62,134343.88,103579.78,120287.45,84115.8,103622],["Aug-20",130405.62,135364.9,103601.77,120823.8,84259.78,105941.68],["Sep-20",131157.28,136382.38,103623.06,121345.17,85391.06,101665.91],["Oct-20",131895.8,137389.59,103645.06,121886.23,86476.06,103618.5],["Nov-20",132615.8,138378.79,103653.58,122397.15,88003.29,113935.6],["Dec-20",133355.8,139402.8,103662.38,122927.32,88363.24,115147.01],["Jan-21",134105.8,140448.32,103671.19,123459.78,88548.36,115501.87],["Feb-21",134775.8,141389.32,103679.14,123942.79,87874.74,116653.85],["Mar-21",135515.8,142435.6,103687.95,124479.65,88455.8,118706.08],["Apr-21",136245.8,143475.38,103696.47,125001.44,90744.07,122815.79],["May-21",136985.8,144537.1,103705.28,125542.89,90970.33,125189.67],["Jun-21",137635.8,145476.59,103713.8,126069.14,92682.68,127836.24],["Jul-21",138385.8,146567.67,103722.61,126615.21,94420.73,129227.7],["Aug-21",139105.8,147622.95,103731.42,127163.64,94981.23,131715.2],["Sep-21",139815.8,148671.08,103739.94,127696.68,93993.93,128171.87],["Oct-21",140525.8,149726.64,103748.75,128249.8,91433.13,128023.28],["Nov-21",141235.8,150789.7,103757.28,128787.4,92291.87,126839.84],["Dec-21",141895.8,151784.91,103766.09,129345.24,92934.64,130136.7],["Jan-22",142625.8,152892.94,103774.91,129905.5,92605.54,118721.81],["Feb-22",143255.8,153856.17,103782.87,130413.73,91829.07,122326.33],["Mar-22",143875.8,154810.08,103791.68,130978.62,89695.07,131098.14],["Apr-22",144515.8,155800.86,103800.21,131527.66,88625.49,129968.88],["May-22",145115.8,156735.67,103831.07,132125.3,88898.03,126056.71],["Jun-22",145725.8,157691.75,103903.61,132760.58,86064.69,114814.88],["Jul-22",146395.8,158748.29,104066.87,133532.96,88697.49,121406.85],["Aug-22",147065.8,159811.9,104230.38,134309.83,87293.67,122128.65],["",null,null,null,null,null,null]]

Source: ASX 200 (^AXJO) Adjusted Close Historical Data
Source: S&P Global - S&P Australia High Yield Corporate Bond Index Historical Data

*Past performance is not an indication of future performance

  Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
2017/18   1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2018/19 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2019/20 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2020/21 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2021/22 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00  1.00  1.00 1.00
2022/23 1.00  1.00                    

Source: Aura High Yield SME Fund Performance Update, July 2022. The Fund’s inception date is August 2017. Past performance is not a reliable indicator of future performance.

Fund Performance

59.31%
Aura High Yield SME Fund
33.97%
RBA Cash Rate + 5% p.a.
25.35%
Out/Under Performance
  Aura High Yield SME Fund RBA cash rate plus 5% p.a. (Benchmark) RBA cash Out/Under Performance
1 month 0.67% 0.58% 0.16% 0.09%
3 months 1.96% 1.61% 0.34% 0.35%
6 months 3.87% 2.94% 0.39% 0.93%
12 months 8.32% 5.60% 0.44% 2.72%
2 years (p.a)  8.31% 5.21% 0.27% 3.10%
3 years (p.a)  8.63% 5.35% 0.33% 3.29%
Since Inception 59.31% 33.97% 4.15% 25.35%
Compounded Annual Return 9.59% 5.92% 0.80% 3.67%
Note: Performance net of fees and expenses. Returns assume reinvestment of all distributions. Past performance is not an indicator of future performance.
The cumulative return is the total return since inception and assumes reinvestment of all distributions.
1. Inception date: 1 August 2017.
2. The Benchmark is the RBA Cash Rate plus 5% p.a.

Aura Funds Management has distributed the following income during the past 58 months.

  Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
2017/18   0.84% 0.87%  0.91% 0.89% 0.93% 0.93% 0.84% 0.93% 0.86% 0.92% 0.88%
2018/19 0.91% 0.90% 0.87% 0.90% 0.86% 0.90% 0.82%  0.79% 0.85% 0.79% 0.84% 0.83%
2019/20 0.75% 0.74% 0.75% 0.78% 0.72% 0.72% 0.73%  0.73% 0.75% 0.72% 0.73% 0.72%
2020/21 0.74% 0.76% 0.74% 0.73% 0.72% 0.74%  0.75% 0.67% 0.74% 0.73% 0.74% 0.65%
2021/22 0.75% 0.72%  0.71% 0.71% 0.71%  0.66% 0.73% 0.63% 0.62%  0.64% 0.60% 0.61%
2022/23 0.67%  0.67%                    

Aura Funds Management may also notify investors from time to time that investors may participate in an arrangement to re-invest their distributions into new Units of the Fund. There may be periods when net income could be negative, and no distribution is made. 

You should read the Information Memorandum (IM) before deciding to acquire units in the product.

Units in the Aura High Yield SME Fund (Fund) are issued by Aura Funds Management Pty Ltd (ABN 96 607 158 814, Authorised Representative No. 1233893 of Aura Capital Pty Ltd (ABN 48 143 700 887, AFSL No. 366 230)) (Aura). Aura is the trustee of the Fund and a subsidiary of Aura Group Pty Ltd.

This information is for wholesale or sophisticated investors only and is provided by Montgomery Investment Management Pty Ltd (ABN 73 139 161 701, AFSL No. 354 564) as the authorised distributor of the Fund.

An investment in the Fund must be through a valid paper or online application form accompanying the Information Memorandum.

The information provided is general in nature and does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision you should read the Information Memorandum and (if appropriate) seek professional advice from a licensed financial advisor to determine whether the investment is suitable for you.

The investment returns or repayment of capital of the Fund are not guaranteed.

The value of an investment may rise or fall and you may risk losing some or all of your capital.  Past performance is not a reliable indicator of future performance.

Investment Team

The underlying investment philosophy of Aura Group’s Private Credit division is to drive active strategies that provide strong regular income. The team maintains a focus on capital preservation through counterparty selection, deal structuring, asset security, diversification, and portfolio construction. The investment team comprises of seasoned professionals with skills and experience to deliver opportunities across the risk spectrum, driving risk-adjusted returns for our investors.

Brett Craig is the Portfolio Manager of the Aura Core Income Fund and is supported by investment analysts James Chapman and Natalie Kolenda.

Brett Craig leads the daily management of the Fund.

Meet our people

Brett Craig

Head of Credit Funds
Read Bio +

HOW TO INVEST

After accessing the Information Memorandum and reading in full the investment objectives and risks of investing in the Aura High Yield SME Fund:

1

Complete the online application form at Olivia 123 and ID verification online (approx. 10 minutes)

2

Submit the completed application form to the Administrator online

3

Transfer the funds and an investment confirmation will be issued by the Administrator

If you wish to make an additional investment (top-up) an existing investment in the Aura High Yield SME Fund, please see the instructions here.

NOT READY TO INVEST YET?

Download the fund information pack or if you would prefer to talk it over, call David Buckland or Toby Roberts on 02 8046 5000 to discuss the Aura High Yield SME Fund in more detail.

Want to invest in your personal super instead?

Our partnership with industry-leading superannuation provider, netwealth, can help.

Insights Subscribe to insights

September 26, 2022

Aura High Yield SME Fund: Letter to investors 26 September 2022

By Brett Craig

The Reserve Bank of Australia has released a renewed paper reviewing how small to medium enterprises (SMEs) access funding. This report comes off the back of a July meeting with the Small Business Finance Advisory Panel, providing an update on the current state of the SME finance market.
September 12, 2022

Aura High Yield SME Fund: Letter to investors 09 September 2022

By Brett Craig

The RBA has raised rates for the fifth month in a row bringing the cash rate to 2. 35% with the expectation of reining in inflation by the end of the year. Largely in line with market expectations, the RBA raised the cash rate by 50 basis points. This is the highest cash rate since early 2015.
September 5, 2022

Aura High Yield SME Fund: Letter to Investors 02 September 2022

By Brett Craig

The retail trade and APRA July 2022 data released this week provided more data to support RBA hikes in the coming months. This week the ABS released data for retail trade turnover and volume. This dataset includes references to retail businesses including stores and online sales.

August 26, 2022

Aura High Yield SME Fund: Letter to Investors 26 August 2022

By Brett Craig

It was a relatively quiet reporting week from an economic and market perspective. Sometimes less news is good news!  This week the ABS released the counts of Australian businesses, which outline the number of actively trading businesses, rates of entry to exit from the market sector of the economy and the rates of business survival.

Frequently Asked Questions

  • 1. Is this Fund suitable for me?

    The Fund has a medium-term (2-5 years) objective suitable for wholesale clients seeking a reliable monthly income solution.

    Investment in the Fund can only be made by persons who are wholesale clients as defined in Section 761G and Section 761GA of the Corporations Act. View wholesale client definition

    The Fund is offered under an Information Memorandum and is an open-ended unit trust that is not registered with ASIC as a managed investment scheme.

  • 2. What is the Fund’s investment objective?

    The Fund aims to provide a 9%-12% yield, distributed as a reliable monthly income from a diversified portfolio of online lending businesses that offer small short-term loans to small and medium enterprises.

  • 3. Where does the Fund invest?

    The portfolio invests across a select group of online lenders that provide small, short-term loans to small and medium enterprises (SMEs) across various industries. The Fund invests in high-quality asset-backed SME loans, director guaranteed SME loans, senior loans to financial technology and alternative finance companies.

    The Fund invests in online lenders that satisfy the following criteria:

    1. There is an underlying exposure to SMEs;
    2. There are processes for robust credit assessments of the underlying SME borrowers;
    3. The lender has a scalable business model with a robust medium-term outlook to ensure the debts will be serviced to a high standard to maturity; and
    4. The lender’s management team has a proven track record.


    The Fund will also invest in other forms of debt with underlying exposures to SMEs, including senior debt, asset-backed securities such as notes, and bonds issued by securitisation trusts (including covered bonds) and loans made via peer-to-peer lending platforms.

    Please refer to Section 4: Investment Plan on page 12 of the IM for further information on the Fund's investment plan.

  • 4. What is the minimum initial investment?

    The minimum investment and minimum wholesale client balance are $100,000.

    You may also add to your initial investment through a lump sum additional investment. Additional investments are accepted every month and will be processed on the first business day of each month (provided an application is made before 5 pm on the last business day of the preceding month and the application monies are received by the issue date.)

    The Fund’s net asset value is determined on the last business day of the preceding month before processing an application.

  • 5. How often is income paid?

    Since its inception, the Fund has paid a monthly distribution every month. View distribution history. It is intended that the Fund will continue to make monthly income distributions to investors.

  • 6. Is there a distribution reinvestment plan available?

    Yes, you can elect to take distributions as follows:

    • Direct deposit to a bank account in the name of the entity investing; or
    • Reinvestment in the Distribution Reinvestment Plan 'DRP'. If no election is made on your application form when you invest, then distributions will automatically be reinvested in the DRP.
  • 7. Where can I view the Fund’s unit price?
  • 8. How can I see my unit balance and investment value online?

    To access your investment online please visit the client portal by clicking on the button below. If you are logging in for the first time, please create an account and add your investment with your account number or investment profile ID.

    Login

  • 9. How do I redeem funds?

    To redeem your holding, fill out the Redemption Request Form and have it signed by the authorised signatories on the account. Please download the Redemption Request Form here.

    An investor may make a redemption request for any Units held by the investor which have been on issue for at least one month. Provided there is available cash for Aura Funds Management Pty Ltd to do so. Valid redemption requests will be processed at the redemption date in each month and will generally be paid on the date which is ten days after the relevant redemption date. There is no guarantee that there will be any available cash for redemption.

    A valid redemption request is one received by Aura Funds Management Pty Ltd between 30 and 45 days before the relevant redemption date. There will typically be a redemption date on the first business day of each month.

  • 10. What has been the default rate in the Fund since inception?

    The Fund has had a very low rate of defaults within underlying loans, lending vehicles or late payments. No defaults of underlying loans have led to capital losses within the Fund.

     

     

Have another question?

Funds

View all funds