NEWS


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.



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