6th August 2008
La Trobe Australian Mortgage Fund -
Pooled Mortgages Option Update
In light of the events in capital markets and mortgage markets over the last twelve months, we thought it valuable to provide you with a specific update on the performance of the Pooled Mortgages Option within our Mortgage Fund.
We would like to reaffirm that La Trobe continues to be very satisfied with the Option's performance in all regards, that there has been no deterioration in the quality of the Option's investments and that we expect the Option to continue to perform strongly going forward.
Highlights of the Pooled Mortgage Option at present are:
- Our variable distribution rate of 8.25% pa* is extremely competitive and going forward we expect to at least maintain our present performance benchmark of exceeding the Reserve Bank of Australia Official Cash Rate by 1.0%.
- The performance of this Option for investors has not been impacted by the 'sub-prime crisis' or by general events in the Australian mortgage market.
- The mortgage investment pool continues to perform strongly in line with our requirements and expectations. This Option does not undertake any medium or large scale construction or 'mezzanine' lending, and our lending to small scale residential construction is presently less than 10% of the pool.
- The average loan to value ratio of the Option at 30 June 2008 was 59.9%.
- Our arrears, default and impairment measures have not changed in the last 12 months relative to previous periods and continue to be very satisfactory.
- Our lending rate increases to borrowers over the last twelve months have been in line with those of the Australian banks. This has not caused any measurable deterioration in borrower performance. Recent indications from the Reserve Bank are that interest rates may now be at the peak of the rates cycle.
- The Pooled Mortgages Option 'Reserve' is a structural enhancement to the security of investors' capital and income. It is available to cover any income or capital shortfalls that might arise in the underlying mortgage pool. This Reserve is presently in line with our benchmark of 1.20% of the total Option investment balance, with no provisions against this amount. We believe that this feature, unique in Australia, is an outstanding enhancement to your investment security.
- The Pooled Mortgages Option has been independently rated by both Standard & Poor's and Property Investment Research in recent years. These reports are available by clicking on the links on the sidebar. These are presently being renewed and to date are consistent with prior years. We are also presently engaging Adviser Edge to rate the Option and we look forward to releasing that report.
- We also note that Morningstar has allocated a 5 out of 5 star performance rating for the Option as a conservative mortgage fund (refer to the Australian Financial Review).**
Extensive, specific information including the ratings papers are provided and regularly updated on our website at www.latrobefinancial.com.au and we will always be delighted to answer any queries you may have in person. Please call La Trobe on 1800 818 818.
Our aim is to provide investors with a low risk investment opportunity that is outstanding in a 'crowded' market place and that stands the test of time and cycles. We trust that the update is helpful for you and we look forward to the opportunity to meet all your ongoing expectations as investors in our Fund.
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Head of Funds Management
t +61 3 8610 2811
Chris Andrews is the Head of Funds Management for the La Trobe Group and has responsibility for the La Trobe Australian Mortgage Fund.
Read full profile here.
La Trobe is one of Australia's leading independent specialist mortgage Financiers. Its business includes residential mortgages, commercial mortgages, and investment services operating one of Australia's largest Mortgage Funds under AFSL 222213. It employs over 115 staff and has raised over AUD$10Billion to assist over 100,000 customers since inception in 1952.
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