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Trust In Your Trust: Why Investors Are Choosing Mortgage Trusts
3 min read

Trust In Your Trust: Why Investors Are Choosing Mortgage Trusts

For those looking for an alternative way to build wealth, the option of investing in a mortgage trust is gaining great appeal. Recent data has shown that the mortgage trust sector has seen great results in recent times, doubling in funds under management in the last 12 months.

There are many different vehicles available to build wealth, consolidate your financial position or bankroll a comfortable retirement… And how you choose to park your investment dollars can be influenced by many different factors, including age, family commitments, income and your own personal appetite for risk.

We’ve seen already this year that some investment categories, more than others, can be volatile and carry the inherent risk of loss. You only have to turn your attention to the huge swings in cryptocurrencies and some of the plunges on the ASX earlier in the year to see how quickly gains can be made and lost – sometimes within minutes! That type of ‘edge of your seat’ investment is not for everyone and is a good illustration of how volatility – where market prices change rapidly and unpredictably – can really make or break an investor’s confidence and financial position.

For those looking for an alternative way to build wealth, the option of investing in a mortgage trust may be more appealing. Recent data from SQM Research has shown that the mortgage trust sector has seen stellar performance in recent times, doubling in funds under management in the last 12 months!

So, how does a mortgage trust work and what’s the drawcard for investors?

Simply put, money is pooled for lending to borrowers in exchange for mortgages taken over Australian property. Investors acquire ‘units’ in a unit trust and receive a monthly income distribution on a per unit basis. These investments are therefore diversified across a range of mortgages and risk is shared across the portfolio by all investors in the trust. Alternatively, in a contributory mortgage trust, the investor, or the fund manager decide which mortgage loan to invest in after reviewing the specific features, benefits and risks associated with that particular loan. Investor’s money is then pooled to lend to the borrower.

One of Trilogy’s most popular products and mortgage trust, is the Trilogy Monthly Income Trust. This Trust has historically been a great performer for our investors, boasting an average net rate of return of 7.85% p.a. over the last five years, with the same above mentioned SQM Research rating the Trust as the number 1 of the top 5 SQM rated funds in their latest April report. Most recently, our investors pocketed a 7.69% p.a. return for the month of March.

As with all investments, there are no guarantees, but our experienced fund managers and financing team leverage more than 40 years of experience in property and lending, as well as an extensive understanding of finance and valuation, when selecting appropriate projects for funding.

If you’re considering an investment in a mortgage trust and you’d like to find out more, speak to Trilogy, an experienced fund manager with a high performing pooled mortgage trust offering. Call 1800 230 099 or email info@trilogyfunds.com.au. A friendly investor relations team member will be able to assist with any questions you may have.

This article has been prepared by Trilogy Funds Management Limited (Trilogy) ABN 59 080 383 679 AFSL 261425 and provides general advice only that does not consider your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances and we recommend that you seek personal financial product advice on your objectives, financial situation or needs and obtain and read the relevant product disclosure statement before making any investment decision.

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