NEWS


AMP SUBORDINATED NOTES 2 (ASX:AMPHA) RATING LOWERED TO A-/ORANGE FROM A+/ORANGE. AMP CAPITAL NOTES (ASX:AMPPA) RATING LOWERED TO A-/RED FROM A+/RED
Thursday, May 17, 2018


AMP Subordinated Notes 2 (ASX: AMPHA) rating lowered to A-/Orange from A+/Orange. AMP Capital Notes(ASX: AMPPA) rating lowered to A-/Red from A+/Red

Melbourne, 17 May 2018 - Australia Ratings has lowered the ratings assigned to the AMP Subordinated Notes 2 (ASX: AMPHA) and the AMP Capital Notes(ASX: AMPPA) - under the ASX’s Debt & Hybrid Research Scheme - by two notches to ‘A-’ from ‘A+’.

Revelations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry are likely to have a significant but unquantifiable impact on the future prospects of the AMP Group, at this time.

Australia Ratings’ analyst Philip Bayley said “The cost of recent actions and the financial consequences for AMP’s future earnings capacity are expected to be severe. Capital adequacy is likely to be strained as a result and AMP’s future capacity to raise capital in need is open to question.”

Mr Bayley continued “For these reasons the credit rating assigned to AMPHA and AMPPA notes are being lowered to ‘A-’ from ‘A+’. Further rating action may be taken as greater clarity emerges around the extent of the damage done to AMP’s financial position. “

A group that was the market leader in Australia and New Zealand’s independent wealth management industry now faces a very uncertain future. The culture and governance of the AMP Group has been shown to be weak and lacking in integrity and its reputation as a custodian of wealth may be irreparably damaged.

Disclosures of misconduct and compliance concerns among AMP’s 2,800 affiliated financial planners reflect a lack of organisational oversight and control at the grass roots level but problems extend right to the highest levels of the group. AMP has been shown to have continued to pay commissions to its planners in breach of the FOFA reforms of 2013. AMP has also charged customers for services that were never provided.

AMP has admitted that affected customers have not been compensated or even informed of their eligibility for compensation for poor advice and other adverse practices that have led to losses being incurred by the customers. AMP has been unable to say when customers will be contacted.

In total, 15,000 customers are affected and AMP has allegedly misled ASIC on 20 occasions about these matters. The drafting of an independent report dealing with the situation, being prepared by Clayton Utz for submission to ASIC, went through some 25 drafts due to re-wording required by AMP’s former Chairman, and Legal Counsel. Some of these actions have led to recommendations of criminal charges being laid.

A new Chairman has been appointed to AMP, and an interim CEO is in place until a permanent appointment is made. There is considerable work to be done at the board level, among senior management and throughout the organisation to repair the damage that has been done. But in the meantime, more than half of the members of the board of directors have resigned and some shareholders are calling for all board members to be replaced by the end of 2018. Turning around the fortunes of an organisation the size of AMP will be more than challenging when continuity and corporate memory at the highest levels of the organisation are lost in this manner.

Compounding the challenges confronting AMP, the group is facing the prospect of multiple class actions being initiated by aggrieved customers and a $2 billion class action by shareholders was initiated last week. AMP is also facing the loss of institutional investment mandates. Australia Post is reviewing its default superannuation plan arrangements and an ethical investment fund will be removing its funds from AMP.

The on-going viability of AMP’s advice business is also under threat. ASIC is intending to ban grandfathered commission payments, which underpin the viability of AMP aligned financial planners.

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For further information contact:

Philip Bayley, Director
philip.bayley@australiaratings.com
03 8080 6684

Chris Dalton, Managing Director
chris.dalton@australiaratings.com
0403 584 600
03 8080 6684

About Australia Ratings

Australia Ratings is Australia’s local credit rating agency with over 60 years of experience in assessing and rating credit risk. Australia Ratings was formed in 2010 following regulatory reforms to the operation of credit rating agencies in Australia. Australia Ratings Pty Limited holds Australia Financial Services License No. 346138.

Opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

About Credit Ratings and Product Complexity Indicators

Australia Ratings credit ratings are an opinion about the creditworthiness of a specific debt security. They take into account the creditworthiness of the issuing organisation and any guarantees or other forms of credit enhancement on the security.

A Product Complexity Indicator is a colour coded indicator to help differentiate debt securities which may have similar credit attributes. It helps highlight complexity in the terms and conditions of a security that could rise to unanticipated variability or change in the returns from the investment.

Credit ratings are not a recommendation to buy, sell or hold a particular security.

View Australia Ratings' Credit Ratings Scale and Product Complexity Indicators (PCI).

ACORN CAPITAL EXPANSION PLATFORM ASSIGNED A 'VERY STRONG' INVESTMENT RATING BY AUSTRALIA RATINGS
Friday, May 04, 2018


Melbourne, 4 May 2018 -  Australia Ratings has assigned a ‘VERY STRONG’ investment rating to Acorn Capital Expansion Platform - the Platform comprising Acorn Capital Expansion Fund (ACEF) and Acorn Capital Expansion Trust (ACET).

A VERY STRONG investment rating indicates a very strong conviction that the Platform can deliver a risk adjusted return in line with the Funds’ investment objective - based on our investment rating scale to indicate how well we believe a fund will perform against a range of risks.

Acorn Capital Expansion Platform is managed by Acorn Capital Limited; and ACEF and ACET are to launch in May 2018. 

The Platform will primarily invest in innovative emerging Australian unlisted companies that are at early/expansion stage of development and with an objective for each fund to generate 20% in returns.  The Manager is looking to invest all the committed capital for both funds within 4 years, to return all committed capital within 5 years, and to exit any remaining investments in an orderly manner thereafter. The maximum term of each of ACEF and ACET will be 10 years.

Australian Ratings believes that ACEP (and either of its constituents, ACEF and ACET) represents a good access point for exposure in innovative and emerging Australian private companies.

The lack of research coverage of unlisted innovative Australian companies can be a potential source of enhanced returns and the upside can be large. However, for all of this potential, a disciplined approach by industry specialists is undoubtedly required.

Australia Ratings believes that investments in ACEF or ACET will be appropriate for high net worth individuals, substantial self-directed superannuation funds and established family offices, to form part of a balanced, diversified portfolio. Investment in the securities of these entities should, however, be considered as a long-term investment.

As new investment structures, both ACEF and ACET do not have any past performance. However, the Manager has significant experience and track record in investing in unlisted assets.

Australia Ratings has also assigned its Product Complexity Indicator (PCI) of ‘YELLOW’ indicating the fund as a complex financial product, with investment managers seeking to outperform their chosen mainstream market sector.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Daniel Liptak, Director
daniel.liptak@australiaratings.com
03 8080 6684

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community.As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds.We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.


About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.

 

 

ACORN CAPITAL INVESTMENT FUND LIMITED ASSIGNED 'VERY STRONG' INVESTMENT RATING BY AUSTRALIA RATINGS
Thursday, May 03, 2018


Melbourne, 3 May 2018 – Australia Ratings has assigned a ‘VERY STRONG’ investment rating to Acorn Capital Investment Fund Limited (“the Fund”).

The VERY STRONG investment rating indicates a very strong conviction that the Fund can deliver a risk adjusted return in line with the Fund’s investment objective based on our investment rating scale to indicate how well we believe a fund will perform against a range of risks.

Acorn Capital Investment Fund Limited, managed by Acorn Capital Limited, is an ASX listed investment company that invests in listed and unlisted microcap companies.

The Fund aims to create a diversified portfolio of microcaps and invest opportunistically in unlisted entities that offer better value to their listed counterparts.This provides investors access to companies differentiated by their smaller size and development stage - via a diversified portfolio.As at March 2018, the Fund’s investment split was 70%, 28% and 2% listed companies, unlisted companies and cash respectively.

Australia Ratings’ analyst Daniel Liptak said “The Very Strong investment rating reflects our view as to the competence, capability and market standing of key portfolio managers and staff running the fund, coupled with anticipated future fund investment manager’s deep experience, resources and solid track record.”

The Fund’s investment philosophy, investment strategy, investment process and risk management are well established and tried and tested. This view is based on the collective experience of the Acorn Capital executives and the fundamental research and investment expertise they exploit to the Fund’s portfolio’s advantage.

Australia Ratings has also assigned its Product Complexity Indicator (PCI) of ‘BLUE’ indicating the fund as a Relatively Simple financial product, with investment managers seeking to outperform their chosen mainstream market sector.

FOR MORE INFORMATION CONTACT:

Daniel Liptak, Director
daniel.liptak@australiaratings.com
03 8080 6684

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community.As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds.We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

 

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


 

AUSTRALIAN EAGLE TRUST ASSIGNED A 'VERY STRONG' INVESTMENT RATING
Friday, April 20, 2018


Melbourne, 20 April 2018 – Australia Ratings has assigned a ‘VERY STRONG’ investment rating to the Australian Eagle Trust (“the Fund”).

A VERY STRONG rating indicates a very strong conviction that the Fund can deliver a risk adjusted return in line with the Fund’s investment objective. This is based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

The Australian Eagle Trust - managed by Alleron Investment Management Pty Ltd - is a long-short strategy that draws on Alleron’s demonstrated expertise in constructing Australian share portfolios.

The Fund aims to provide capital growth over the longer term through a leveraged long-short Australian shares strategy. In the year to 31 March 2018, the Fund has outperformed the S&P/ASX 100 Acc Index by 15.83%.

Australia Ratings’ analyst Maggie Callinan said “The Fund is managed by a stable, experienced and well-credentialed investment management team that implements a robust and disciplined investment process.” Ms Callinan adds, "The investment philosophy, investment strategy, investment process and risk management elements of the company’s activities are well established and embedded within Alleron."

Australia Ratings believe that an investment in the fund can provide an exposure to Australian equities with potential to outperform the underlying market and a form of downside protection.An investment in the fund should be considered as a long-term one.

Australia Ratings has also assigned its Product Complexity Indicator (PCI) of ‘YELLOW’ indicating the fund as a Complex financial product, with investment managers seeking to outperform their chosen mainstream market sector - the Australian equities market, by including a leveraged short-selling component to its strategy.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:
Maggie Callinan, Director 
maggie.callinan@australiaratings.com 
03 8080 6684

About Australia Ratings
Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community.As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds.We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating
Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.


About the Product Complexity Indicator
Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


 

AUSTRALIA RATINGS EXPANDS TO INVESTMENT RATING & RESEARCH SERVICES
Friday, March 02, 2018


Melbourne, 2 March 2018 – Australia Ratings has announced its recent expansion into rating of funds and other investment products.The new investment rating and research service focuses on compelling investment strategies and quality fund managers to help investors identify investment opportunities that are among “best in class”.

Australia Ratings’ Managing Director, Chris Dalton said “Since releasing our first investment ratings in the last quarter of 2017, we’ve seen a growing demand from independent advisors and the wealth management groups for quality, reliable research on managed funds that offer distinct and attractive opportunities.”

Mr Dalton added, “We aim to cover a broad range of funds.We will seek to build on our strong capabilities in equity, credit and alternative assets for those investors seeking to diversify with specialist funds. Our focus will be to work with financial advisors, wealth managers, informed investors and family offices who are looking for fresh investment ideas and quality fund managers.”

Based on qualitative and quantitative analysis, Australia Ratings’ investment rating reflects a forward looking opinion to help investors gauge a fund's or investment’s performance against a benchmark index.

A five-point scale is used to differentiate Australia Ratings’ opinion on how well a fund will perform against a range of risks. From the highest ‘Superior” rating – indicating a highest level of confidence to the lowest ‘Weak’ rating – indicating that the Fund is unlikely to deliver a return in line with its objectives.A colour-coded product complexity indicator (PCI) attached to the rating will also highlight to investors an investment product’s complexity level.

The launch of Australia Ratings’ investment rating and research services is a natural progression for the local rating agency which currently provides credit ratings on ASX listed debt and hybrid securities and private analytical work.

The investment ratings team is led by Chris Dalton and consists of fund analysts with deep knowledge in risk analysis, fund selection and financial journalism including Daniel Liptak, Maggie Callinan and Simon Ibbetson.

Australia Ratings is the first and only local rating agency to hold a retail Australian Financial Services Licence (AFSL).

Find out more about Australia Ratings new investment rating and research service www.australiaratings.com/investment-ratings

For more information contact:

Chris Dalton, Managing Director
03 8080 6684
0403 584 600

Bonnie Hill, Client Relations Director
03 8080 6684
0417 142 817

Download Media Release (pdf)

About Australia RatingsAustralia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community. As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology.The Board of Australia Ratings, whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk, oversee the application of Australia Ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating
Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term.The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

About the Product Complexity Indicator
Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


SANDHURST STRATEGIC INCOME FUND ASSIGNED A 'SUPERIOR' INVESTMENT RATING BY AUSTRALIA RATINGS
Friday, February 23, 2018


Melbourne, 23 February 2018 –Australia Ratings has assigned a ‘SUPERIOR’ investment rating to the Sandhurst Strategic Income Fund (the Fund).

A ‘SUPERIOR’ investment rating indicates the highest level of confidence that the Fund can deliver a risk adjusted return in line with the Fund’s investment objective. This is based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

Australia Ratings’ analyst Maggie Callinan said “Since inception, the Sandhurst Strategic Income Fund has delivered to its objective providing returns of 0.80% over the benchmark of a 5 year basis, while maintaining a high level of capital stability and liquidity.“

Ms Callinan added, “the rating also reflects the investment manager’s experience. The investment process applied is robust and the investment approach is conservative, technical and highly analytical.”

The Sandhurst Strategic Income Fund’s objective is to provide enhanced cash investment targeting a return above the benchmark Bloomberg AusBond Bill Index. The Fund invests primarily in Australian dollar denominated cash, money market securities and asset backed securities. The portfolio is actively managed to minimise capital loss and provide consistent income over time.

Sandhurst Trustees Ltd – a wholly-owned subsidiary of the Bendigo and Adelaide Bank - is the investment manager and responsible entity of the Fund. Sandhurst has Bendigo and Adelaide Bank’s support for the strategy and employs a well-defined and rigorous process.

Australia Ratings has also assigned its Product Complexity Indicator (PCI) of ‘BLUE’ indicating the fund as a Relatively Simple financial product, with investment managers seeking to outperform their chosen mainstream market sector. The strategies used to outperform are well documented and do not include the use of leverage or derivatives for trading purposes. While this fund is expected to move fairly closely in line with mainstream markets, there may be periods where it outperforms or underperforms the benchmark index.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Maggie Callinan, Director
maggie.callinan@australiaratings.com
03 8080 6684

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community. As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks

 

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


MCP MASTER INCOME TRUST (MXT) ASSIGNED A 'SUPERIOR' INVESTMENT RATING
Friday, February 09, 2018


Melbourne, 9 February 2018 – Australia Ratings has assigned a ‘SUPERIOR’ investment rating to MCP Master Income Trust (MXT) (the Trust).

A SUPERIOR indicates the highest level of confidence that the Trust can deliver a risk adjusted return in line with the Trust’s investment objective. This is the highest investment rating that can be assigned by Australia Ratings based on our investment rating scale to indicate how well we believe a fund will perform against a range of risks.

The MCP Master Income Trust (MXT), managed by Metrics Credit Partners Pty Ltd, is an ASX listed investment trust investing in the Australian direct corporate loan market, a sector which is dominated by bank investment.The Trust was launched in October 2017 with a market capitalisation of $537 million as at end December 2017.

The Trust offers investors monthly targeted rate of 3.25%p.a. above the RBA cash rate with a low risk of capital loss by investing in a well-diversified and actively managed portfolio of Australian corporate loans.

Australia Ratings’ analyst Maggie Callinan said “MXT’s Superior rating reflects the investment manager’s deep experience, resources and solid track record.” Ms Callinan adds, “the Trust offers investors an attractive investment on a risk-return basis offering well managed, well diversified investment in a sub-asset class that would otherwise be difficult to access for non-bank investors.”

Australia Ratings has also assigned its Product Complexity Indicator (PCI) of ‘BLUE’ indicating the trust as a Relatively Simple financial product, with investment managers seeking to outperform their chosen mainstream market sector - the Australian corporate loan market.

The investment, equity funded corporate loans, currently has no core leverage.The strategies used to outperform, while requiring a depth of market experience and due diligence, are completely compatible with normal market practice.This includes the potential conversion of debt to equity in a restructuring, where the strategy is designed to limit capital loss.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Maggie Callinan, Director maggie.callinan@australiaratings.com 03 8080 6684

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community.As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds.We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

 

 

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


 

AURA HIGH YIELD SME FUND ASSIGNED A 'STRONG' INVESTMENT RATING BY AUSTRALIA RATINGS
Wednesday, February 07, 2018


Melbourne, 7 February 2018 – Australia Ratings has assigned a ‘STRONG’ investment rating to Aura High Yield SME Fund (“the Fund”).

A STRONG investment rating indicates a strong conviction that the fund can deliver a risk adjusted return in line with the fund’s investment objective; based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

The Aura High Yield SME Fund - managed by Aura Funds Management Limited – invests in non-bank lenders specialising in providing finance to small to medium (SME) businesses in Australia. The Fund obtains this exposure through structured notes that are backed by secured and unsecured loans to SMEs that provide an attractive risk adjusted return.

The Fund offers monthly income, targeting returns at 12% p.a. (net of management fees) with low level of capital loss from a diversified portfolio of debt securities, principally issued by lenders to SME businesses. As at 31 December 2017, the Fund had $6 million assets under management since its inception in August 2017.

Australia Ratings’ analyst Daniel Liptak said “The Fund offers an attractive investment on a risk-return basis that captures the higher interest rate premium of SME loans without the substantial cost overhead typical of a bank lender. “ Mr Liptak adds “the Strong investment rating reflects the investment managers’ deep industry experience and the investment team’s long history in FinTech and AltFi Fintech financing.”

Australia Ratings has also assigned its Product Complexity Indicator of ‘YELLOW’ indicating the fund as a Complex financial product. This indicates that the investment manager will seek to outperform their chosen specialist market secto - the Australian SME loan market. A key risk is the ability of Aura to identify and validate superior loan underwriting and servicing standards of non-bank lenders with experience in the SME sector.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Daniel Liptak, Director daniel.liptak@australiaratings.com 03 8080 6684

 

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community. As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.


A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


KARARA MARKET NEUTRAL FUND ASSIGNED A 'STRONG' INVESTMENT RATING BY AUSTRALIA RATINGS
Monday, January 22, 2018


Melbourne, 22 January 2018 – Australia Ratings has assigned a ‘STRONG’ investment rating to Karara Market Neutral Fund (“the Fund”).

A STRONG investment rating indicates a strong conviction that the fund can deliver a risk adjusted return in line with its investment objective; based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

The Fund is an Australian equity market-neutral fund; investing in products across large cap, small cap, mid cap and long only REIT and market neutral. The fund predominantly trades liquid Australian listed equity, property and infrastructure with moderate leverage.

Karara Market Neutral Fund is managed by Karara Capital and is currently open to wholesale investors. The fund was established in August 2016 and its aim is to outperform the RBA cash rate (after fees) over rolling five-year periods. The target is high single-digit/low double-digit returns per annum net of fees.

Australia Ratings’ analyst Daniel Liptak said “The Strong investment rating reflects the investment team’s solid experience.” Mr Liptak continued, “Performance history is relatively short and at this stage there is relatively low FUM-based revenue. While this would usually be highly concerning, that is not the case in this instance given the involvement and commitment of the Karara research and investment team members.”

Australia Ratings has also assigned its Product Complexity Indicator of ‘ORANGE’ indicating the fund as a more complexfinancial product. This indicates that the fund generates returns through a variety of non-standard investment strategies. Products of this type are often known as Hedge Funds. The strategies used include model-driven investment selection, return generation using derivatives, and a performance profile that does not track mainstream markets. This type of fund is typically used to diversify portfolio risk or to provide superior returns to the underlying market.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Daniel Liptak, Director daniel.liptak@australiaratings.com 03 8080 6684

ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community. As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.

About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.

DAINTREE CORE INCOME TRUST ASSIGNED A 'STRONG' INVESTMENT RATING BY AUSTRALIA RATINGS
Saturday, January 20, 2018


 

Melbourne, 20 January 2018 – Australia Ratings has assigned a ‘STRONG’ investment rating to Daintree Core Income Trust (“the Trust””).

A STRONG investment rating indicates a strong conviction that the trust can deliver a risk adjusted return in line with its investment objective; based on an investment rating scale used by Australia Ratings to indicate how well we believe a fund will perform against a range of risks.

Daintree Core Income Trust is managed by Daintree Capital Management. The Trust invests in a diversified portfolio of fixed income securities and cash to provide returns that exceeds the RBA cash rate by 1.5% - 2% p.a. after fees and usual expenses, over a rolling 12-month period. The Trust had $20.85 million in funds under management as at 31 December 2017.

Australia Ratings’ analyst Daniel Liptak said “The Strong investment rating reflects the investment team’s and portfolio managers’ deep experience.” Mr Liptak adds “we believe that investors will benefit from the strength of experience within the team, the flexibility of the investment process and ability to find global opportunities.”

Australia Ratings has also assigned its Product Complexity Indicator of ‘YELLOW’ indicating the fund as a Complex financial product. Monies invested in the Fund are pooled and used to purchase eligible assets on behalf of all investors in the Fund. The Manager is able to use derivatives (unleveraged) to move portfolio to reflect changes to global market conditions. The Fund will make a distribution to investors at the end of each month based on the distributable income of the Fund.

A full rating report is available from www.australiaratings.com/.

FOR MORE INFORMATION CONTACT:

Daniel Liptak, Director daniel.liptak@australiaratings.com 03 8080 6684


ABOUT AUSTRALIA RATINGS

Australia Ratings is a local, independent rating agency that provides timely and credible ratings information and research to the broader investment community. As an ASIC-licensed rating agency, we provide general advice by issuing credit ratings on debt securities and companies; and fund ratings on Australian managed funds. We are Australia’s only agency that holds a retail Australian Financial Services Licence (AFSL). This enables both retail and wholesale investors to use our credit ratings to help them gauge credit risk and complexity of financial products sold in the Australian market.

Rating opinions of Australia Ratings are determined by its analytical team in accordance with its rating methodology. The Board of Australia Ratings whose members include Jarrod Brown, Chris Dalton and Mike Dontschuk oversee the application of Australia ratings rating methodology and the integrity of the rating process.

About Australia Ratings’ Investment Rating

Our investment rating reflects Australia Ratings’ current opinion of a fund’s or an investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected consistency of the fund’s or investment’s performance within its peer or style group and on the fund manager’s ability to produce superior performance amongst its peers in the near term with due regard to the medium-term consensus view of the asset class to which the product is benchmarked.

A five-point scale is used to differentiate our opinion on how well we believe a fund will perform against a range of risks.


About the Product Complexity Indicator

Our proprietary colour-coded product complexity indicator (PCI) highlights the complexity level of an investment by its terms and conditions’ structure and transparency that may affect an investor’s return.


 


 

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