13th August 2008

Dear Investor,

La Trobe's Investment Allocation for the Pooled Mortgages Option

As with most investments the key to success can lie in the appropriate diversification of your investments funds.

What Is Diversification?

When we talk about diversification in relation to investments, we are referring to the attempt by investors to reduce their exposure to risk by investing in various assets across different sectors, industries or even countries. Most investment professionals agree that although diversification is no guarantee against loss, it is a prudent strategy to adopt towards achieving your long-term financial objectives.

Successful investors know that diversifying their investments can help reduce the impact that a single, poorly performing investment can make on their overall portfolio, or mix of investments. This belief is often summed up in the adage "Don't put all your eggs in one basket".

The same principals that relate to investors also relate to
La Trobe's Pooled Mortgages Option.

Determining the Investment Mix

An important first step in building and maintaining our Pooled Mortgages Option is the establishment of a well-diversified portfolio of qualifying mortgages. This is where we decide on how to divide the funds invested in this option among the various mortgage investments available. This process is called asset allocation and is an investment strategy that aims to balance risk and return by apportioning the portfolio's assets according to the investment goals and risk tolerance.

The Pooled Mortgages Option is diversified at two distinct levels as part of its asset allocation. This is referred to as sector allocation and geographic allocation. The management of the Pooled Mortgages Option pays special attention not only to the optimal mix of cash and qualifying mortgage investment but also to the distribution of investment funds between security types, for example residential, vacant land, commercial, industrial and rural properties and geographic location, that is, in terms of Australian mortgages, the percentage of total funds invested in each state and territory.

The Pooled Mortgages Option aims to consistently hold investments in a wide range of mortgages in a range of industry sectors, with geographic diversification across Australia as established and reviewed by our Board of Directors.

The Pooled Mortgages Option holds the majority of its invested funds in mortgages secured predominately by residential property but also other traditional properties such as commercial offices, retail shops and industrial sites.

Maintaining a Diversified Portfolio

La Trobe's dedicated management team regularly reviews the investments in the Pooled Mortgages Option. The Fund often adjusts its weighting between sectors following changes in the economy or state related issues. La Trobe understands that it's never easy to find the time to review your investments and this is why many investors have chosen to invest in the Pooled Mortgages Option.

About La Trobe

The diversified Pooled Mortgages Option of the Fund reflects La Trobe's professional approach to investment management and over 50 years' experience in mortgage lending.

The La Trobe Group is one of Australia's leading mortgage managers with total funds under management exceeding $1.6 billion.

La Trobe prides itself on its investment management performance and aims to provide consistently higher returns from an investment option that performs well across the economic cycle, with little volatility and controlled overall risk to the investment.

It's important, however, to remember that no matter how diversified a portfolio is, your investments can never be totally devoid of risk. You can reduce risk associated with investing but there are inherent market risks that affect nearly every investment. No amount of diversification can prevent a certain amount of risk inherent in investing.


Best regards,
Chris Andrews

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Chris Andrews
Head of Funds Management

t  +61 3 8610 2811
e  candrews@latrobefinancial.com.au

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.

Copyright 2010 La Trobe Financial. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial. Disclaimer



* La Trobe Financial Asset Management Limited ABN: 27 007 332 363 and AFSL No: 222213 is the issuer and manager of the La Trobe Australian Mortgage Fund. It is important for you to read the Product Disclosure Statement for the Fund before you make any investment decision. You can get a copy of the PDS by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you.
(1) The rates of return from the Fund are not guaranteed and are determined by future revenue of the Fund, and may achieve lower than expected returns. Past performance is no guarantee of future performance. Investors risk losing some or all of their principal investment.
(2) Withdrawal rights are subject to liquidity and may be delayed or suspended.
(3) As at 30/11/10 the La Trobe Australian Mortgage Fund had received a Morningstar RatingTM of 5 stars. The Morningstar Rating is an assessment of a fund's past performance - based on both return and risk - which shows how similar investments compare with their competitors. A high rating alone is insufficient basis for an investment decision. © 2010 Morningstar, Inc. All rights reserved. Neither Morningstar, nor its affiliates nor their content providers guarantee the above data or content to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. You should consider the advice in light of these matters and, if applicable, the relevant product disclosure statement, before making any decision. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.pdf
(4) 3.75 star rating out of a possible 5 star rating indicates that Adviser Edge believes that La Trobe has performed in line with its peers and exceeded its peers on some fronts.
(5) The Standard and Poors rating of 4 out of 5 stars indicates that S + P has high conviction that La Trobe Financial will consistently generate risk-adjusted fund returns in excess of its relevant investment objectives and relative to its peers.
(6) The award was given to the La Trobe Australian Mortgage Fund, Pooled Mortgages Option.
Research Ratings are subject to change. To view the latest research information please visit www.adviseredge.com.au or www.standardandpoors.com.au. Ratings issued by Adviser Edge Investment Research AFS Licence No. 236783 and Standard & Poors Information Services (Australia) Pty Ltd AFS Licence No. 258896 are solely statements of opinion and not statements of fact or recommendations to purchase, hold, or sell any securities or make any other investment decisions. The ratings are only one factor to be taken into account in deciding to invest. Research Houses receive a fee from La Trobe for rating the product. The Adviser Edge rating is generally a measure of the rated entity's capacity to meet its repayment obligations in all market circumstances.
IMPORTANT: This message, together with the La Trobe Financial website (www.latrobefinancial.com.au) and all its contents have been prepared for general information only and should not be taken as legal or financial advice, and as such the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before acting on any information present on this message or the La Trobe website.