Thank you to everyone who joined our recent webinar, we hope you found the discussion engaging. For those who were unable to attend live, or who would like to revisit the session, I’m pleased to share the recording below, which you can watch at a time that suits you.
We know income reliability matters – and we’re here to support you at every step. If you have further questions after watching, our friendly team is here to help on 1800 818 818.
Investing in a time of uncertainty – webinar transcript
This is a written transcript of our recent “Investing in a time of uncertainty” webinar presented by Chris Paton, Chief Investment Officer, La Trobe Financial
Introduction
Well, hello and a very warm welcome to you all. Thank you for joining me for today’s webinar.
Chris Paton is my name, and I’m the Chief Investment Officer at La Trobe Financial. I’m joined online today by Michael Watson, our Director of Wealth Solutions, who will be helping us navigate through the presentation materials.
We will be recording today’s presentation, so if you need to leave early, would like to rewatch it, or share it with colleagues or clients, we’ll be distributing the recording later this week.
We meet today at a time of heightened geopolitical and macroeconomic uncertainty globally – uncertainty around energy supply, inflation, and the collective implications for the Australian economy, interest rates and markets more broadly. There’s no question that, as investors and advisers, you’re being asked to digest a great deal right now.
With that context, our goal today is to lean into simplicity. We’ll narrow our focus to the La Trobe Financial Australian Credit Fund, and in particular our 12-Month Investment Account, and how it is constructed to provide steady income in times of uncertainty.
We also want to give you plenty of time to ask questions. Please use the Q&A function at the bottom of your screen. I’ll address those anonymously at the end of the session. Thank you to those who submitted questions at the time of registration.
If you have questions about other La Trobe Financial strategies, we’d be very happy to receive them and one of our relationship managers will follow up separately. For today, however, it’s all about our foundational asset class – the La Trobe Financial Australian Credit Fund.
Business Update
Today, La Trobe Financial manages approximately $23 billion in assets on behalf of almost 130,000 investors, with around 5,100 financial advisers placing funds into our strategies.
That scale reflects decades of disciplined focus on Australian mortgage credit, combining consistent performance with a service-led model built on long-term investor relationships.
As a business, we exist to solve complex financial problems for our customers in a friendly and human way. This is reflected in our approach to asset management, which is based on quality investment products and high levels of human-centred customer service.
Whatever your touch point with La Trobe Financial, we pride ourselves on simplicity – ensuring our investment products are easy to understand.
La Trobe Financial Australian Credit Fund Overview
With a history dating back to 1989, the La Trobe Financial Australian Credit Fund has a stated aim of protecting investor capital while delivering strong risk-adjusted returns.
We manage over $14 billion across approximately 130,000 investors, and the Credit Fund has delivered on its investment objective for more than 35 years.
At La Trobe Financial, we focus on quality assets, quality structures, and disciplined management. The fund is deliberately constructed with everyday Australians in mind – those planning for, transitioning to, or already in retirement.
The purposeful way we construct portfolios is designed for moments like the one we’re in today.
Product Suite and Performance
A key pillar of our approach is delivering thoughtfully designed products, backed by portfolios built to perform through all market, economic and interest-rate cycles.
Within our seven strategies focused on Australian mortgage credit – our foundational asset class – the flagship product is the 12-Month Investment Account. This strategy alone has over $11 billion in assets under management and is widely recognised in the market as a multi-award-winning solution.
Across the seven strategies, we provide investors with choice across a range of duration and return profiles, aligned to differing risk appetites.
It would be remiss of me not to highlight that our rates are increasing. All portfolio accounts are enjoying a 25 basis point increase, effective from 1 April, with the rates shown reflecting those adjustments.
If I could show you one chart to summarise performance across all cycles, it would be the accumulation graph for the 12-Month Investment Account since inception in 2002. It reflects real outcomes – not theoretical back-testing.
The curve moves consistently upward, with no negative months in its performance history. In simple terms, this represents:
- 100% return of capital
- A flawless liquidity profile
- Continual outperformance of benchmarks
A dollar invested at inception remains a dollar today, and the same consistency can be observed across our other portfolio offerings.
Investment Fundamentals
Our performance is underpinned by three investment fundamentals:
1.Quality of Assets
We operate in the complex prime segment of the Australian mortgage market. These are high-quality borrowers with credit profiles comparable to the major banks, but with circumstances that don’t suit automated bank lending models.
This may include self-employed borrowers, professionals with variable income, high net worth individuals with complex structures, or self managed superannuation funds.
Of the approximately $3.1 trillion in Australian mortgage loans, around $1 trillion falls into this complex prime segment. We settle between $15 billion and $20 billion in loans annually, allowing us to be highly selective.
Our hands-on credit assessment process is undertaken by experienced lending professionals, and approximately 95% of our borrowers have never experienced a credit event.
2. Diversification
The 12-Month Investment Account contains 11,977 individual loans, with an average loan size of approximately $920,000.
This is a deliberate strategy – many small exposures rather than a few large ones. The largest loan represents roughly 2% of the portfolio.
We diversify by borrower type, security type and geography, with around 64% invested in residential mortgages, complemented by selective exposure to commercial, light industrial, rural, vacant land and development finance.
Development finance represents approximately 11% of the portfolio, well below the 15% maximum.
3. Conservatism
Conservatism – or margin of safety – is embedded at multiple levels:
- 100% first mortgage security
- Maximum LVR of 80%, with a portfolio average of 67%
- A dedicated investor reserve mechanism
This reserve exists solely for investors, absorbing capital losses and smoothing income. Currently, it stands at 33 basis points, or approximately $37 million, representing around 11 times coverage of the average annual loss rate.
Portfolio Health
Arrears within the La Trobe Financial Australian Credit Fund currently sit at approximately 3.7%, well within the long-term historical range of 2.5% to 4%.
The rolling seven year average annual loss rate is just three basis points in the 12-Month Investment Account, fully absorbed by the investor reserve.
Key Takeaways
To summarise:
- Quality matters – high-quality borrowers and disciplined underwriting drive resilient outcomes.
- Diversification matters – thousands of well-secured loans across borrowers, assets and geographies.
- Conservatism matters – first mortgages, prudent LVRs and investor reserves.
In uncertain times, fundamentals matter most – and that’s exactly what the La Trobe Financial Australian Credit Fund is built around.
Q&A
Yes. Rates are variable and reviewed monthly by our Asset Liability Committee. Existing investors will receive the 25‑basis‑point increase effective from 1 April.
The average LVR is approximately 67%, meaning there is roughly $150 of property value securing every $100 of loans.
La Trobe Financial has never gated, frozen access, or failed to meet a redemption due to liquidity. This is supported by a comprehensive framework with over 30 contingent liquidity levers, tested through events such as the GFC, COVID-19 and the Silicon Valley Bank crisis.
The La Trobe Financial Australian Credit Fund invests in Australian mortgage credit – first-mortgage loans secured against real property. This is fundamentally different from corporate private credit, which is typically secured against enterprise value.
We do not lend to software‑as‑a‑service or corporate private credit borrowers.
Predicting exact rate movements is difficult. Instead, our focus is portfolio construction that is resilient across changing interest‑rate environments, with stress‑testing applied at both borrower and portfolio levels.
No. None of our investment products are government‑guaranteed.
La Trobe Financial worked collaboratively with ASIC to address concerns relating to Target Market Determinations. These were resolved promptly, without impact on portfolio performance, liquidity or investor outcomes.
Thank you again for joining us today. If you’d like to learn more about our products or discuss anything from today’s webinar, please don’t hesitate to reach out to our Asset Management team on 1800 818 818.
We hope to see you at one of our Meet the Manager sessions in April or May.
Thank you, and enjoy your afternoon.
La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence No. 222213 Australian Credit Licence No. 222213 is the responsible entity of the La Trobe Australian Credit Fund ARSN 088 178 321. It is important that you consider the Product Disclosure Statement (PDS) when deciding whether to invest or continue to invest in the fund. The PDS and Target Market Determinations are available on our website
