06 October 2011

Dear Investor,

New 'Recommended' rating for the most diversified fund in the mortgage sector

Over the years, Investment News has frequently focussed on the importance of diversification in building an investment portfolio. We have always emphasised the enduring relevance of the old maxim "Never put all your eggs in one basket". By holding a properly diversified portfolio, investors can minimise the risk that all of their investments will underperform at the same time.

For this reason, La Trobe Financial is particularly pleased to announce that the Pooled Mortgages Option ("PMO"), an investment option in the La Trobe Australian Mortgage Fund, has been awarded a 'Recommended' rating by Zenith Investment Partners. In awarding the rating, Zenith described the PMO's long term performance as "excellent".

This is the first time that Zenith has rated the PMO, which also holds a 4 star rating from Standard and Poor's and a 3.75 star rating from Adviser Edge/SQM.

The PMO was established in 2002 to provide investors with exposure to a pool of loans secured by a diversified, Australia-wide portfolio of mortgages. Unlike some other funds in the sector, it has always been able to pay eligible redemptions and has never returned a cent of capital loss to investors. According to Zenith analyst, Dugald Higgins, the PMO is "... suited to those seeking capital stability and an income return which should solidly exceed the cash rate through investment cycles."

La Trobe Financial was established in 1952 as a specialist fund manager and mortgage lender. Zenith picked up on this long history in commenting on La Trobe Financial's "...impressive track record" and "... deep lending experience spanning 59 years as an organisation."

A key objective of the PMO is to earn the investor confidence that comes only from consistent and repeated performance. In times like the present, when equities markets are experiencing such volatility, the PMO's investors are targeting capital stability and reliable income at a premium to cash. PMO has provided that since inception.

Highest level of diversification in the sector

It is particularly pleasing that Zenith recognised that the PMO has "... the highest level of diversification in the mortgage fund sector." La Trobe Financial's unique co-investment model diversifies the funding sources for each individual loan, meaning that the PMO can massively increase its number of investments and decrease its average size of investment. This achieves enhanced diversification, which smoothes asset performance for investors and thereby contributes to an exceptionally stable absolute return profile.

In other comments, Zenith:

  • highlighted the strength of La Trobe Financial's asset selection procedures, describing La Trobe Financial's credit assessment processes as 'robust' and lending criteria as 'stringent'.
  • emphasised La Trobe Financial's expertise in balancing risk and return, stating that the PMO has produced '... high interest returns relative to the risk.'

This can only be seen as confirmation that the PMO is an effective vehicle by which investors can get exposure to a consistently high-performing asset class and so improve both the diversification and absolute return performance of their portfolios.

A copy of Zenith report can be obtained by clicking on the link below.

Best regards,
Chris Andrews

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Chris Andrews
Head of Funds Management

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

Daryl Hill
0408 566 524
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0409 419 039
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03 8610 2868
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03 8610 2810
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03 8610 2818
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Nadia Chriestian
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Investor Liaison

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 145 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. The PDS is available on our website www.latrobefinancial.com.au or by calling 1800 818 818. You should consider carefully whether or not investing in the Fund is appropriate for you.
* 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.
- Withdrawal rights are subject to liquidity and may be delayed or suspended.
- The award and ratings were given to the Pooled Mortgages Option within the La Trobe Australian Mortgage Fund.
The rating is only one factor to be taken into account in deciding to invest.
1. Zenith's "recommended" rating indicates that it has high confidence in the manager meeting its objectives. The Zenith. Investment Partners ("Zenith") ABN 60 332 047 314 rating referred to in this document is limited to "General Advice" (as defined by section 766B of Corporations Act 2001) and based solely on the assessment of the investment merits of the financial product on this basis. It is not a specific recommendation to purchase, sell or hold the relevant product (S), and Zenith advises that individual investors should seek their own independent financial advice before investing in this product. To view the relevant research information, please visit www.latrobefinancial.com.au The rating is subject to change without notice and Zenith has no obligation to update this document following publication. Zenith usually receives a fee for rating the fund manager and product against accepted criteria considered comprehensive and objective.
2. Standard and Poor's (4 Stars - Research Rating) "The S&P rating of 4 out of a possible 5 stars indicates that Standard & Poor's has high conviction that the manager will consistently generate risk-adjusted fund returns in excess of its relevant investment objectives and relative to its peers. Ratings are subject to change. To view the latest research information please visit www.standardandpoors.com.au. Ratings issued by Standard & Poor's 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. Research houses receive a fee from La Trobe Financial for rating the product."
3. SQM Research - 4 stars to 4.25 stars - superior, suitable for inclusion on most Approved Product Lists. To view the relevant research information, please visit www.latrobefinancial.com.au This rating will not take into account your, or your clients' objectives, financial situation or needs. It is up to investors to consider whether specific financial products are suitable for your objectives, financial situation or needs. Research houses receive a fee from La Trobe Financial for rating the product.
4. Lipper Leaders Rating Total Return (Score – 5) Lipper Ratings for Total Return reflect funds’ historical return performance relative to peers. The ratings are subject to change every month. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5 for Total Return. Lipper Leader ratings are not intended to predict future results and does not guarantee the accuracy of this information. More information is available at www.lipperweb.com. Thomson Reuters Copyright, All Rights Reserved.