Current Unit Price: (20 min. delayed price) ASX:MXT $2.00 -0.50%
NAV as at COB: 01.12.20 $2.0028
Current Unit Price: (20 min. delayed price) ASX:MOT $1.93 0.26%
NAV as at COB: 01.12.20 $2.0252

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Innovative corporate loan fund marks three-year milestone

26 October 2020

Australia’s first ASX-listed corporate loan fund and the country’s largest credit LIT, the MCP Master Income Trust (ASX:MXT), this month celebrates a three-year track record of successful performance.

Launched in October 2017, MXT opened up a sector of the fixed income market that was previously only available to high net worth and institutional investors.

Commenting on the milestone, Andrew Lockhart, Metrics Managing Partner said: “The Australian corporate loan market is an attractive alternative source of income from a capital stable asset class for investors, and delivers an important source of non-bank debt finance to support the growth of Australian companies.

“We launched MXT to give investors a way to access this exciting opportunity set in a simple, listed format that provides liquidity not usually available in this asset class.”

MXT invests in a diversified portfolio of ~150 loans to Australian corporates, with the interest and fees paid by borrowers delivering monthly income for investors.

Since inception MXT has delivered a net return of 5.41%, a spread of 4.25% above the RBA cash rate[1] and well above its target of 3.25% over RBA Cash. MXT is positively rated by all the major ratings agencies, including a ‘Superior’ investment rating by Australia Rating Analytics (Australia Ratings) and a ‘Highly Recommended’ by Zenith Investment Partners.

MXT has also been awarded Listed Fund of the Year by both Zenith and Lonsec, and Metrics was recently named Australia’s Best Alternative Investment Manager at the 2020 Australian Alternative Investment Awards.

Metrics offers a second listed ASX corporate loan fund, the MCP Income Opportunities Trust (MOT), launched in April 2019. MOT targets a higher cash yield of 7% p.a., paid monthly, with a total target return of 8-10%, net of fees and expenses.

Since inception, MOT has also exceeded its minimum target return. MOT was launched to provide investors with an alternative to direct investment in equities. Many investors invest in equities to generate income, whereas MOT provides an alternative way of generating income via direct lending to companies.

Not all credit LITs are created equal

MXT has continued to pay its regular monthly income distribution and maintain a stable market value throughout the COVID pandemic, which has not been the case for all credit LITs.

“Financial markets and the operating environment have changed a great deal since we first launched MXT, however this performance shows the fund is structured to perform throughout market cycles, delivering a stable source of income and superior risk-adjusted returns compared to traditional asset classes,” Mr Lockhart said.

Since the launch of MXT, several other credit LITs have emerged offering a range of different credit exposures to retail investors. Mr Lockhart notes that investors should take care to do their research when selecting credit LITs, focusing on regional location, risk profile and public/private nature of the underlying assets.

Alternative to traditional asset classes

Mr Lockhart said corporate loans offered a potential alternative to traditional fixed income or equity investments, due to the regular income they provide, coupled with the defensive nature of the underlying investments.

“Corporate loans may be lower risk investments compared with growth assets such as equities and property because they come with a range of embedded protections. Loans are generally secured by the borrower’s assets and lenders are paid before equity holders in the unlikely event of business insolvency. In addition, returns are linked to inflation,” he said.

In contrast to most fixed income and term deposits, corporate loans can also provide daily liquidity if invested in through an Australian Stock Exchange-listed vehicle.

Mr Lockhart added that corporate loans have a low correlation to other major asset classes including equities, government bonds, hybrids and term deposits, providing an excellent source of portfolio diversification for investors.

Regular and consistent income

In addition to the potential for an attractive total return, Mr Lockhart notes that corporate loans also offer regular, consistent income.

“This is a key benefit if you are an investor who relies on income to meet your day-to-day expenses,” he said.

[1] IPO 9 October 2017. Performance is annualised and assumes participation in Distribution Reinvestment Plan (DRP). Past performance is not a reliable indicator of future performance.

Disclaimer: This information provided in this communication is of a general nature only, is not intended for retail investors, does not constitute financial product advice and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of any of the funds managed by Metrics Credit Partners Pty Ltd (Metrics) ABN 27 150 646 996 AFSL 416 146 (each a Fund), you should consider the current offering document of the relevant Fund and assess whether that Fund is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

Neither the responsible entity or the trustee of a Fund nor Metrics guarantees repayment of capital or any particular rate of return from that Fund. Neither the responsible entity or trustee of a Fund nor Metrics gives any representation or warranty as to the reliability, completeness or accuracy of the information contained in this communication. To the maximum extent permitted by law, Metrics disclaims all and any responsibility or liability for any loss or damage which may be suffered by any person relying upon any information contained in or omission from this communication. Past performance is not a reliable indicator of future performance.

Current Unit Price: (20 min. delayed price) ASX:MXT $2.00 -0.50%
NAV as at COB: 01.12.20 $2.0028
Current Unit Price: (20 min. delayed price) ASX:MOT $1.93 0.26%
NAV as at COB: 01.12.20 $2.0252

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All website content in respect of the MCP Master Income Trust ARSN 620 465 090 (the Trust) is issued by The Trust Company (RE Services) Limited ABN 45 003 278 831 AFSL 235 150 (Perpetual) as responsible entity of the Trust and is prepared by Metrics Credit Partners Pty Ltd ABN 27 150 646 996 AFSL 416 146 (Metrics) as the investment manager of the Trust.

The information provided in this website is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of the Trust, you should consider the current product disclosure statement (PDS) of the Trust and the Trust’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au/, and assess whether the Trust is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

Neither Perpetual nor Metrics guarantees repayment of capital or any particular rate of return from the Trust. Neither Perpetual nor Metrics gives any representation or warranty as to the currency, reliability, completeness or accuracy of the information contained in this website. All opinions and estimates included in this website constitute judgments of Metrics as at the date of website creation and are subject to change without notice. Past performance is not a reliable indicator of future performance.

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Personal Trading in Non-Perpetual Securities | RE Services Personal Trading in Non-Perpetual Securities | Unitholders Communications Policy | Continuous Disclosure Policy

The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned May/2019) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines

Disclaimer and disclosure

All website content in respect of the MCP Income Opportunities Trust ARSN 631 320 628 (the Trust) is issued by The Trust Company (RE Services) Limited ABN 45 003 278 831 AFSL 235 150 (Perpetual) as responsible entity of the Trust and is prepared by Metrics Credit Partners Pty Ltd ABN 27 150 646 996 AFSL 416 146 (Metrics) as the investment manager of the Trust.

The information provided in this website is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of the Trust, you should consider the current product disclosure statement (PDS) of the Trust, and the Trust’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au, and assess whether the Trust is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

Neither Perpetual nor Metrics guarantees repayment of capital or any particular rate of return from the Trust. Neither Perpetual nor Metrics gives any representation or warranty as to the currency, reliability, completeness or accuracy of the information contained in this website. All opinions and estimates included in this website constitute judgments of Metrics as at the date of website creation and are subject to change without notice. Past performance is not a reliable indicator of future performance.

Cororate Governance
Personal Trading in Non-Perpetual Securities | RE Services Personal Trading in Non-Perpetual Securities | Unitholders Communications Policy | Continuous Disclosure Policy

The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned May/2019) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines

Disclaimer and disclosure

All website content in respect of the Metrics Direct Income Fund ARSN 641 620 331 (the Fund) is issued by Evolution Trustees Limited ACN 611 839 519 AFSL 486 217 (Evolution) as responsible entity of the Fund. Metrics Credit Partners Pty Ltd ABN 27 150 646 996 AFSL 416 146 (Metrics) is the investment manager of the Fund.

The information provided in this website is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of the Fund, you should consider the current product disclosure statement (PDS) of the Fund which is available at www.metrics.com.au, and assess whether the Fund is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

Neither Evolution nor Metrics guarantees repayment of capital or any particular rate of return from the Fund. Neither Evolution nor Metrics gives any representation or warranty as to the currency, reliability, completeness or accuracy of the information contained in this website. All opinions and estimates included in this website constitute judgments of Metrics as at the date of website creation and are subject to change without notice. Past performance is not a reliable indicator of future performance.

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