During periods of economic change investors tend to focus on one thing: income that they can depend on. Inflation in Australia, and globally, has remained more persistent than many expected. Over the past quarter, expectations for interest rates shifted quickly, with the Reserve Bank of Australia delivering two rate increases in quick succession. At La Trobe Financial, our focus remains unchanged: delivering dependable income designed to adapt as market conditions evolve.
Income That Responds As Rates Evolve
One of the advantages of the La Trobe Financial Australian Credit Fund is its ability to respond to rising interest rates. Following the two recent RBA increases, the Fund passed on the full 50 basis-point rise to investors. As rates moved higher, investor income increased alongside them. This outcome reflects the way the portfolio is deliberately constructed; responsiveness is no coincidence.
Designed To Be Inflation-Aware
The Fund maintains a high allocation (~78%) to variable rate loans. As interest rates rise, the income generated by these loans adjusts accordingly – helping investor income keep better pace with inflation. Importantly, this approach does not rely on predicting where rates are heading next. We do not build portfolios around interest rate forecasts. Instead, we design portfolios to perform across market cycles – whether rates are rising, falling, or holding steady. Strong underlying income settings help support consistent performance through different economic conditions.
A Proven, Diversified Approach
Many investors will be familiar with our 12 Month Investment Account, which reflects this philosophy in action. Since inception in October 2002, the strategy has delivered consistent real income through a wide range of environments – including the Global Financial Crisis, COVID, and today’s elevated inflation backdrop. That consistency is supported by broad diversification across thousands of predominantly variable rate loans, each secured by Australian property. Diversification by location, borrower and sector helps reduce reliance on any single outcome – allowing income to work steadily in the background.
Built For Confidence, Not Predictions
While higher interest rates can support higher income, our longer-term objective remains unchanged: helping maintain purchasing power and delivering dependable income over time. In an environment where inflation has re-emerged as a key risk, this distinction is particularly important.
An investment in the Credit Fund is not a bank deposit, and investors risk losing some or all of their principal investment. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.
Past performance is not a reliable indicator of future performance.
Any advice is general and does not consider your personal circumstances. Consider the relevant PDS and TMD on our website before investing.
La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 is the responsible entity of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important for you to consider the Product Disclosure Statement (PDS) when deciding whether to invest, or continue investing, in the Credit Fund. You can read the PDS and the Target Market Determinations on our website.
