A non-pooled securitised investment Fund, providing investors monthly income, capital security and investor control.
Better returns, less risk, more options
Since 1925, The Australian Securities Income Fund has provided investors a choice of mortgage security investments with different risk and income scenarios. Investors select a specific mortgage security sourced and managed by Australian Securities on terms approved by the investor. These terms include, interest rate, investment type and the investment amount*. The investor receives monthly income in the form of mortgage interest repayments for the duration of the term. The Income Fund is suitable for Superannuation Funds, Retirees, Pension Funds, Trustees, Institutions, Not-For-Profit Organizations such as Charities or Foundations and for individuals seeking a secure fixed monthly income.
Features and Benefits
Reliable returns
Fixed or variable interest rates are available averaging between 6% – 10% dependant on the type of loan, security and risk level chosen by the investor. Interest rates will generally be higher when the interest rate is fixed, construction works are being performed, an early repayment option has been set or an interest reset option exists. Interest is collected and distributed monthly. Australian Securities Interest Assurance Fund assures an investor’s expected income is paid on time each month to the investors nominated bank account.
Reducing risk
Titles of all properties provided as security for investments, are retained by the Fund manager. Investors can be registered on title depending on the security type. Once all funds (including interest) has been repaid to the investor, titles are transferred back to the borrower. A maximum conservative loan to valuation ratio (LVR) of 66% for all securities provides the investor with a healthy risk buffer in the event of a downturn in the property market.
You choose the options
Investment terms range between 1 – 5 years, with a fixed interest rate paid monthly to maturity. Further options include a Building rate during the term of any construction period and a Fixed term or Early Term Repayment option. When a mortgage security matures, the investor has first option to reinvest on the mortgage security if the borrower applies to extend the loan term.
Shielding your capital
When investors subscribe to a specific mortgage security, they are the only investors eligible to share in the income and capital repayments on winding up the specific mortgage security. Australian Securities Income Fund is not a pooled fund, ensuring individual investor returns cannot be impacted by other sub-schemes within the Fund.
Mortgage title proprietary provides a surety for investor funds
Nominee Mortgage
ASL is registered as mortgagee and trustee for each investor. This is our most popular mortgage security type for investors not wishing to be registered on title deeds.
Direct Mortgage
Single investor is registered as mortgagee on the mortgage security title.
Contributory Mortgage
Investors are registered on title as contributory mortgagee.
Tier 2 Mortgage®
A second tier investor taking a higher bracket loan to asset value ratio which attracts higher returns.
Only local securities are considered for the Income Fund
Investments are secured with local assets being Mortgage securities over residential, commercial, industrial or development real estate. Securities are all Australia based, located predominantly in Melbourne, Sydney and Brisbane.
Residential
[Credit Regulated] Owner Occupied for investment in residential Property, for business or Investment purposes
Construction
Development of one or more dwellings or commercial or industrial buildings with construction costs being funded by the mortgage security
Commercial
Commercial property provided as security for finance
Specialist Lending
Tailored for specialist lending, bridging finance and or land development
Security & risk management
On 9 May 2012 ASIC revised Regulatory Guide RG45 (issued September 2008) which developed 8 benchmarks for unlisted mortgage schemes for retail investors to better understand and assess the risks, rewards and suitability of this form of investment. Australian Securities explains how the Income Fund deals with each ASIC benchmark here. The benchmark should be read in conjunction with the Product Disclosure Statement. Prior to any investment, members are provided a detailed Mortgage Security Description (MSD) which provides substantial detail to make an informed choice.
A Target Market Determination (TMD) document is required under section 994B of the Corporations Act 2001 (Cth) (the Act). It sets out the class of consumers for whom the product, including its key attributes, would likely be consistent with their likely objectives, financial situation and needs. The TMD should be read in conjunction with the Product Disclosure statement.
Management fees
A flat management fee [0.81% inclusive of GST] for the amount invested in each mortgage security applies during the term of the investment. Payable by deductions from monthly interest or at early repayment of the investment. No other fees apply unless ASL is requested to perform services outside the usual terms of reference for managing investments.
Commissions
ASL does not pay commissions. Investors can elect to pay their Adviser’s fees periodically using our Financial Adviser facility. Finance clients can elect to pay their Introducer’s fees periodically using our Finance Fee Facility. There is no charge by ASL for this service.
*(investment minimums apply) please see Explanatory notes on page 5 of Product Disclosure Statement for the Australian Securities Income Fund
AVERAGE LVR*
44%
*Average Loan to Valuation Ratio (LVR) across all mortgages 31 Dec 2022BLENDED RETURN*
5.80%
*Net average return rate. Blended Tier 1 & 2. 31 Dec 2022TIER I RETURN*
4.94%
*Net average return rate. 31 Dec 2022TIER II RETURN*
8.22%
*Net average return rate.31 Dec 2022IMPORTANT INFORMATION: Rates displayed are averaged across all mortgages in the Fund, within there own Tier, ie., Tier 1 or Tier 2. The blended rate (indicated) is a conservative average of both Tier 1 and Tier 2 investments that appear in member portfolios. Interest rates are fixed and agreed at the commencement of a security investment. Investors choose the rate, the security type and the risk scenario ie Tier one (lower LVR* lower interest rate) or Tier 2 (Higher LVR higher interest rate) or a number of both. The Income Fund is not a pooled Fund and each investment operates independently to other investments in the fund. Minimum investment amounts, Terms and Conditions apply when investing in an Australian Securities Fund. Refer to the PDS or contact the Fund Investment Manager for further information.
Australian Securities recommend prospective investors read both the Target Market Determination (TMD) and the Product Disclosure Statement (PDS) provided by the Fund which provides detailed information on features, benefits, management fees and associated risks before making an informed decision. ASL does not provide investment advice to its members or the general public. We do not know the financial position or needs of the reader. Investment decisions you make should be taken after giving careful consideration to your personal needs and any risks that may be associated with an investment. The information included on this page is not a recommendation or substitute for professional investment advice. Past Performance for Australian Securities Funds is no guarantee of future performance.
*(LVR) Loan to Valuation Ratio