February 2013

 Dear Investor,

A new dawn?

Welcome to the first edition of Investor Insights for 2013.

The first month of 2013 has seen an air of optimism return to the financial markets. Money has been flooding away from bonds and into risk assets, particularly shares. Commentators have been increasingly positive in their sentiment. Some have vocally suggested that a global recovery has commenced while others have hailed the arrival of a 'bull market'. Some have called a recovery in housing prices. Will these predictions be proven correct? In our view it is too early to tell. What can be said is that even if a global recovery has commenced, there may well be upcoming developments that rock the boat and cause market volatility. Challenges for investors remain and will need to be negotiated.

How does an investor handle all of this new information? The basic response of a sensible investor remains the same. We have previously written of the three immutable rules of investing. It is timely to review them under current circumstances:

  1. Never put all your eggs in the one basket:

    Diversification is a key principle of investing. La Trobe Financial provides investors with diversification on a number of levels:

    1. By providing four diverse investment options to give investors flexibility in their investments to meet their individual needs.

    2. By providing different risk/return profiles for each of the investment options so that investors can match their investments with their own risk/return appetites.

    3. By providing a diversified portfolio of loans that:

      1. For the Cash & Mortgages and Pooled Mortgages Option, spreads an investor's risk beyond a single loan to a pool of loans that is diversified in a number of ways, including by borrower, by geography and by sector.

      2. For the Direct Mortgages and High Yield Mortgages Option, allows investors to select the individual mortgage or pool of mortgages in which they wish to invest.

  2. A higher rate of return generally equals higher risk:

    At different times in the economic cycle, spruikers will arise to promote their version of the perennial 'get rich quick' schemes. Exotic financial instruments, margin loans and the like tend to feature prominently. Complexity is also a notable common feature and frequently makes it very difficult for investors to assess the risks inherent in the investment. Unfortunately, as many investors have found out to their woe, complex schemes offering very high rates of return generally also have very high risks of failure.

    By contrast, La Trobe Financial seeks to provide investors with investment options that are straightforward in design, so that the risks associated with each investment are disclosed and can be readily assessed.

  3. Getting rich slowly will never go out of fashion:

    In one of his annual addresses to investors in Berkshire Hathaway, Warren Buffett stated:

    "Investing is not like Olympic diving... you don't get extra points for degree of difficulty."

    This sums up the third immutable rule of investing. Keep it simple and don't invest to get rich overnight on speculative tips, but invest for longer periods getting modest stable returns which will be repeatable.
As always you should seek your own professional investment advice before making any investment decision.


 Best regards,
Chris Andrews
Head of Funds Management




The following awards and ratings were given to the Pooled Mortgage Option within the La Trobe Financial Mortgage Fund


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Randal Williams
Chief Wealth Management Officer

t  +61 3 8610 2831
e  rwilliams@latrobefinancial.com.au

Chris
Chris Andrews
03 8610 2811
Vice President, Head of Funds Management
Daryl
Daryl Hill
0408 566 524
Vice President, Head of Major Clients

Michael Watson
0409 419 039
Senior Manager Client Partnerships
Megan
Megan Pfab
0408 126 664
Senior Manager Client Partnerships
Jason
Jason Gidman
03 8610 2818
Portfolio
Specialist
Cheree
Cheree Cain
03 8610 2810
Funds Operations
Manager
Richard
Richard Anstey
03 8610 2809
Portfolio
Manager

Freddy Gong
03 8610 2858
Assistant Portfolio Manager
Helmuth
Helmuth Ewinger
03 8610 2833
Senior Manager Client Partnerships
Stacey
Stacey Hynes
03 8610 2805
Senior Manager Client Partnerships
Peter
Peter Polemikos
03 8610 2834
Senior Manager Client Partnerships
Terrie
Terrie Simpson
02 9238 2065
Senior Manager Client Partnerships
Jo
Jo Ni
03 8610 2803
Investor Administration Officer
Ada
Ada Yeung
03 8610 2865
Investor Administration Officer



La Trobe Financial 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 2013 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 be lower than expected. Investors risk losing some or all of their principal investment. The investment is not a bank deposit.
- Past performance is no guarantee of future performance.
- 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. 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.
3. 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.