Each month, La Trobe Financial produces a series of short videos. Watch now to stay up to date with our business, our portfolios and what we are seeing in the economy. This month, we provide an update on our portfolio performance, as well as share our current thinking on the property market and economy.

Business & Portfolio Update: Chris Paton, Chief Investment Officer

The La Trobe Australian Credit Fund continues to chalk up important milestones in its mission to provide low-volatility income, while remaining careful stewards of investor capital:

  • From 1 June 2023, portfolio accounts will enjoy a 25-basis point increase in distribution rates.
  • Market volatility from the US regional banking mini-crisis, headlined by Silicon Valley Bank, has subsided.
  • La Trobe Financial recently closed a $1 billion RMBS transaction with participation from local and international investors.  This transaction highlights the high regard in the market for our asset quality and management.

Economic Update: Michael Watson, Head of Distribution

While the current inflationary peak may have passed, it remains uncomfortably high. Each economic indicator is being viewed through a singular lens: is it net inflationary? This month, we investigate wage price growth and its impact on inflation and interest rates:

  • Despite rising wages, increased costs of living sees real wages in negative territory.
  • This inflationary cycle remains supply-side driven, with inflation running well ahead of wage prices.
  • Wages growth is not the net-inflationary smoking-gun which would alone warrant upwards movement in the Official Cash Rate.

Property Market Update: Tanya Hoshek, National Distribution Manager

Following a global trend of surging prices post-COVID, Australian property prices have moderated. Our central position of a 15% peak-to-trough fall nationally remains intact, with demand/supply fundamentals acting as floors against any larger falls:

  • New listings and total stock on market remain well below their five-year averages
  • Population growth, and a trend of fewer people-per-dwelling sees rental vacancies near a record low, and rents growing by over 10% year-on-year.
  • The undersupply of new dwellings entering the market shows no sign of abating to ease this dynamic.

An investment in the Credit Fund is not a bank deposit, and investors risk losing some or all of their principal investments. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended. Visit our website for further information.

La Trobe Financial Asset Management Limited ACN 007 332 363 Australian Financial Services Licence 222213 Australian Credit 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 for the Credit Fund in deciding whether to invest, or to continue to invest, in the Credit Fund. You can read the PDS and Target Market Determinations on our website www.latrobefinancial.com.au, or ask for a copy by calling us on 1800 818 818.

La Trobe Financial Services Pty Limited ACN 006 479 527 Australian Credit Licence 392385.

To the extent that any statement in this content constitutes financial product advice, that advice is general advice only and has been prepared without considering your objectives, financial situation or needs. You should, before deciding to acquire or to continue to hold an interest in the La Trobe Australian Credit Fund, consider the appropriateness of the advice having regard to your objectives, financial situation or needs and obtain and consider the Product Disclosure Statement for the Fund.

© 2023 La Trobe Financial Services Pty Limited ACN 006 479 527. All rights reserved. No portion of this may be reproduced, copied, or in any way reused without written permission from La Trobe Financial.

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