Protecting Capital.
Powering Wealth.

The Manning Monthly Income Fund delivered +0.65% in July 2026. To 31 July 2026, returns were 8.36% over 12 months, 9.11% per annum over three years, 8.51% per annum over five years and 7.35% per annum since inception in April 2016.

The Fund targets the RBA cash rate plus 5% per annum over rolling five years. Over five years the Fund exceeded the cash rate by 5.35% per annum, and by 4.47% over the past 12 months. Returns are inclusive of distributions, net of fees and exclude tax. Past performance is not a reliable indicator of future performance.

Portfolio Outlook

The Fund continues to carry a higher than targeted level of cash while several larger transactions progress through due diligence, documentation and settlement. This may moderate returns in the short term. However, we remain comfortable allowing deployment to occur methodically as the opportunity set continues to improve. With participation from competing funding providers reducing, we are seeing increasingly attractive risk-adjusted opportunities, including better pricing, stronger structures and, in some cases, access to higher quality underlying borrowers than was available when capital was more abundant. This continues the trend we discussed last month, where reduced participation across parts of the market was beginning to improve both transaction economics and investor protections.

Different Property, Different Risk

Property has featured heavily in credit headlines recently, with specific examples from particular segments of the market often discussed in the context of property-backed lending more broadly. However, from a credit perspective, significant differences exist between the various forms of property exposure. An established house in an metropolitan suburb, a rural property, a luxury residence, a development site acquired for its rezoning potential and a partly completed apartment project may all sit beneath the broad heading of “property”, but their underlying risk characteristics are very different.

The ability to readily sell the property at the current valuation (liquidity), the depth of the potential buyer pool, reliance on planning or construction outcomes, the price of the property compared to suburb averages and the profile of the expected buyer all vary materially. As a result, weakness in one segment of the property market does not necessarily tell us very much about the credit performance of another.

The same principle applies across other forms of lending. Stress among a particular group of US software companies, for example, would tell us relatively little about the outlook for a diversified pool of asset-backed business loans in Australia. The broad category may be the same, while the underlying credit exposure is quite different.

Therefore, for us, the relevant question is not simply whether an exposure is secured by property. The questions are: what property, at what valuation, with what level of leverage, supporting what size loan and with how many realistic avenues to repayment?

Where We Invest

Within the Fund’s mortgage exposures, our preference is predominantly for established residential property in major metropolitan markets. We favour collateral with existing utility: property that can be occupied, rented or sold today, without its value depending on construction being completed, a rezoning occurring or a particular development outcome being achieved.

We also favour granularity. Smaller loans spread across large numbers of borrowers and properties provide a very different risk profile from a portfolio built around a limited number of large individual property exposures. The objective is that the performance of any one borrower or property should not determine the outcome for Fund investors.

The Fund does not invest in property construction finance. We do not regard these as through-the-cycle assets given their greater reliance on project completion, future sales, refinancing conditions and valuations that may depend on an asset reaching a different state in the future. This has been a deliberate feature of the Fund strategy throughout our history, rather than a tactical response to current market conditions.

We are similarly selective around large individual property loans, highly specialised or rural assets and more speculative property where the valuation or recovery may depend on a relatively narrow pool of buyers. These distinctions become increasingly important when property conditions are less buoyant. An existing asset with utility, a conservative LVR and a deep secondary market has very different recovery characteristics from an asset whose value depends heavily on what it may become several years from now.

There can also be advantages to lending after property markets have moved away from peak conditions. Valuations established in a more conservative environment can provide a better starting point for a lender than valuations formed during periods of exceptionally strong demand. We would rather lend against a supportable value today than require continued asset price appreciation or future valuation uplift for the credit to work.

Bank Appetite and the Non-Bank Market

There is another side to a more cautious property and lending environment which can be particularly relevant for non-bank lenders.

Banks are generally the lowest cost source of finance for Australian borrowers. When banks are competing aggressively and have a strong appetite for credit, they naturally retain a greater proportion of high-quality borrowers. Non-bank lenders are therefore competing across a narrower pool of customers, often comprising borrowers seeking greater flexibility, speed or loan structures outside traditional bank parameters.

As bank appetite becomes more selective, that non-bank opportunity set can expand. Borrowers with strong credit characteristics and good-quality assets who may previously have obtained bank finance can increasingly move into the non-bank market. For specialist lenders, and ultimately funding providers such as us, this can provide access to a broader universe of high-quality lending opportunities.

We have two dynamics occurring at the same time. A more challenging economic or property outlook warrants greater caution around leverage, valuations and borrower selection. At the same time, reduced competition can improve borrower quality, create more conservative entry valuations and allow better pricing and stronger lending terms.

For a credit investor, this can turn a more uncertain backdrop into an attractive deployment environment, provided the manager has the flexibility and patience to select the opportunities that benefit from that change, while avoiding the areas where risk is increasing.

Allocating Through the Cycle

Zooming out, the Fund is a diversified credit strategy, not a mortgage/property fund. Its mandate allows us to allocate across mortgage, business and consumer backed exposures according to where we believe the best risk-adjusted returns are available. Property remains an important part of that opportunity set because the Australian residential market provides a very large and comparatively liquid pool of real assets to lend against. However, there is no requirement for the Fund to maintain a particular exposure simply because it has held it historically.

That flexibility is particularly valuable through a cycle. If risk increases in one segment, capital can be allowed to repay and redeployed elsewhere. If reduced bank appetite creates an unusually attractive opportunity in high-quality residential mortgages, we can increase exposure. If business backed lending offers stronger collateral and more attractive economics, capital can move in that direction instead. The objective is not to maintain a static asset allocation, but to continually allocate towards the areas where borrower quality, asset protection, structure and return are most attractive. This flexibility across mortgage, business and consumer backed exposures has long been central to the Fund’s approach.

The breadth of the Fund also matters. We provide funding across over 20 specialist lenders, multiple sub-asset classes of credit, geographies and tens of thousands of underlying loans. This means the portfolio is not reliant on a small number of properties, borrowers or exit events to determine the outcome for investors.

As the Fund moves through its eleventh year, we believe the current environment is increasingly attractive for a credit investor with capital available, a broad opportunity set, and the ability to remain selective. The Fund has already operated through periods of significant dislocation, rapid changes in interest rates, liquidity shocks and different property cycles while maintaining its focus on a high and consistent level of income and capital preservation.

A ‘through the cycle approach’ is not about predicting each change in property prices, bank appetite or the broader economy. It is about having the mandate, relationships and discipline to adjust as those conditions change. At present, that means continuing to take our time with deployment, staying away from areas where we believe risk is poorly rewarded and using a more selective funding environment to build exposure to increasingly attractive opportunities as they emerge.

The Manning Credit Opportunities Fund delivered +1.12% in June and 13.17% over the past 12 months. Since inception, the Fund has delivered an annualised return of 14.55%, continuing to exceed its objective of net returns of over 10% above the RBA cash rate.

Portfolio Activity

Five existing lenders drew on their facilities during June, reflecting continued activity across the portfolio and the depth of our long-standing lending relationships. The portfolio continues to perform in line with expectations, supported by a diversified range of asset-backed facilities and consistent underlying borrower performance.

One aspect of the Fund that is often less visible is the level of ongoing portfolio activity. While new drawdowns naturally receive attention, capital is also continually being repaid and reallocated as underlying borrowers repay or refinance their loans and our non-bank lenders recycle capital through their funding facilities. This creates an active portfolio, with capital continually being redeployed into opportunities that meet the Fund’s return and risk requirements.

Maintaining the Fund's Return Profile

The Fund has a relatively high target return and, by extension, a comparatively high cost of funds. Maintaining this return profile requires the continual sourcing, assessment and execution of new opportunities, even when the portfolio is performing in line with expectations.

While the current market continues to present attractive opportunities, only a relatively small proportion ultimately meet the Fund's credit, structural and return requirements. Our focus remains on identifying transactions where structure, security and pricing combine to deliver attractive risk-adjusted returns, rather than deploying capital simply to increase portfolio size.

Consistent with this, we are seeing an increasing number of opportunities secured by real property. The Fund's broad mandate allows us to assess opportunities across multiple segments of the credit market as relative value evolves.

Outlook

The pipeline remains healthy and we continue to progress a number of opportunities through various stages of due diligence and structuring. As always, deployment will remain selective, with capital allocated only where opportunities meet the Fund's disciplined credit standards and risk-adjusted return requirements.

The Manning Monthly Income Fund delivered +0.66% in June, 8.45% over 12 months and 9.15% annualised over three years. Since inception, the Fund has delivered an annualised return of 7.35%, continuing to exceed its objective of net returns of over 5% above the RBA cash rate.

#1 Diversified Credit Fund for FY26

We were pleased to see the Manning Monthly Income Fund ranked by Livewire Markets as the top performing diversified credit fund for FY26, with a net return to investors of 8.45%. This follows the Fund’s recognition as the top-performing Australian fixed interest fund for FY25.

League tables naturally change from year to year, but this recognition is particularly pleasing as the Fund enters its eleventh year.

The Fund’s performance is not the result of a strong single year or a favourable market cycle. It reflects more than a decade of delivering a high and consistent level of monthly income, with no negative monthly returns arising from credit losses since inception.

Importantly, these results have been achieved without focusing on construction or property development finance, concentrated non-investment-grade corporate lending or moving further up the risk curve. They reflect the same disciplined approach that has underpinned the Fund since inception: deploying only where the risk, structure, counterparty quality and investor protections meet our standards, and accepting slower deployment rather than compromising on capital preservation.

30 June: A Valuation Test for Credit Funds

Ahead of the financial year end, ASIC put credit funds on notice to ensure their 30 June asset valuations are current, accurate and based on realistic assumptions.

ASIC described the sector as entering its first real test, with pockets of higher defaults, impairments and loan amendments beginning to emerge. It also identified the risk of valuations lagging economic reality, particularly in property development, and inconsistencies in how funds define arrears, impairments, amendments and provisions.

ASIC’s message was clear. Managers should not wait for a formal default before reassessing the value and risk of an investment.

This matters because reported returns can appear stable for some time if deteriorating assets are not appropriately valued or losses are not fully recognised.

In our view, an impaired investment is not necessarily made whole simply because an originator, manager or related entity provides a corporate undertaking or records an amount owing to the fund. That support must itself be enforceable, appropriately valued and recoverable. Otherwise, the economic shortfall may remain, even though the investment continues to be carried at or near its original value.

These issues are particularly relevant in vertically integrated structures where the same group originates the loan, manages the fund, services the borrower and has influence over valuation and impairment decisions. Vertical integration is not inherently problematic, but it creates conflicts that require genuine independence and strong governance. ASIC has specifically highlighted the increased conflict risk where valuation and impairment decisions may be affected by misaligned incentives during periods of stress.

The Fund Today

Manning provides structured funding to circa 25 specialist non-bank lenders across a broad range of asset-backed lending sectors.

As we enter the new financial year, the Fund is now in its eleventh year and remains positioned as intended. It has operated through COVID, liquidity shocks, rapid monetary tightening, periods of significant market volatility and changing economic conditions, while continuing to deliver a high and consistent level of income and preserve investor capital.

We are also entering a more attractive environment for new deployment. Participation across parts of the credit market has reduced, competitive pressure is easing and we are seeing opportunities with improved pricing, stronger structures and better investor protections. The Fund has recently carried a higher level of cash as several transactions progress through documentation and settlement, rather than compromising on quality simply to remain fully deployed.

The strength and stability of our investor base allows us to remain patient and selective while these opportunities progress. We thank investors for their continued support and remain focused on deploying capital where the structure, return and downside protections are appropriately aligned.

The Manning Credit Opportunities Fund delivered +1.09% in May and 13.13% over the past 12 months. Since inception, the Fund has delivered an annualised return of 14.56%, continuing to exceed its objective of net returns of over 10% above the RBA cash rate.

Pipeline Progression

Transaction activity continued to build during the month, with several opportunities progressing meaningfully through the investment process. A number of transactions have now advanced beyond due diligence, with commercial terms agreed and documentation underway. The current pipeline includes a number of new lending relationships, together with a number of opportunities that fall uniquely within the Credit Opportunities Fund's mandate.

This marks a noticeable change from earlier in the year. Transaction volumes have increased, and as funding markets have become more selective, experienced long-term funding providers are increasingly negotiating from a stronger position. Beyond pricing, we are seeing improved commercial outcomes across a range of transaction terms, reflecting the value borrowers continue to place on certainty of execution and committed long-term funding relationships.

Portfolio Activity

Four existing lenders drew additional funds under their facilities during the month, reflecting continued growth across established portfolio relationships.

Beyond capital deployment, we continued working closely with several counterparties as their businesses evolved. This included supporting new lending products, extending long-term funding arrangements and working collaboratively on initiatives designed to strengthen funding capacity and support future growth. This remains an important, but often less visible, aspect of the strategy. Our objective is to become a long-term funding partner to a select group of high-quality lenders rather than simply providing capital for individual transactions. As relationships mature, opportunities frequently arise to support future growth initiatives, expand funding arrangements and continue improving the overall quality of the portfolio.

Looking Ahead

While the recent increase in activity is encouraging, the Fund's growth will continue to be measured. Many of the transactions within the strategy are bespoke, require extensive structuring and involve multiple counterparties. It is common for opportunities to remain under assessment for many months and, despite significant time and resources being invested, not every transaction ultimately proceeds.

For that reason, the Fund will continue to grow in line with completed deployment opportunities rather than investor demand alone. We believe this disciplined approach has been an important contributor to the Fund's long-term performance and remains fundamental to how the strategy is managed.

The portfolio continues to perform in line with expectations and the Fund remains closed to new and existing investors.

The Manning Monthly Income Fund delivered +0.72% in May, 8.50% over 12 months and 9.18% annualised over three years. Since inception, the Fund has delivered an annualised return of 7.34%, continuing to exceed its objective of net returns of over 5% above the RBA cash rate.

Discipline Is Being Rewarded

Much of the discussion surrounding credit over the past two years has focused on the significant amount of capital that has flowed into the asset class. While strong investor demand is often viewed positively, periods of abundant liquidity can also create their own challenges. When capital is readily available, competition for transactions typically increases, pricing tightens and lending terms can become increasingly borrower friendly.

In contrast, more balanced markets often create better conditions for disciplined credit investors.

As capital becomes more selective and competition moderates, there is generally less pressure on lenders and funding providers to compromise on structure, pricing or credit protections. Historically, some of the most attractive lending vintages have emerged during periods where capital remains available, but is deployed more selectively and with greater regard for risk. From our perspective, this is increasingly what we are seeing today. Existing transactions continue to broadly perform as expected, while the environment for new deployment has become progressively more attractive.

Portfolio Performance Remains Consistent

Importantly, this improvement in opportunity is not being accompanied by any deterioration in underlying portfolio performance. Lenders continue to draw under existing facilities and repayment activity remains consistent with expectations. Across the portfolio, we have not observed any material change in borrower behaviour, arrears, collateral quality or underlying asset performance.

The Quality of Opportunity Is Improving

While existing portfolio performance remains stable, the opportunity set for new deployment is becoming more attractive. For much of the past 12 to 18 months, strong inflows into credit created a highly competitive funding environment. In most parts of the market, this resulted in tighter pricing, weaker covenants and pressure on managers to deploy capital. When capital is abundant, borrowers and originators are often able to negotiate terms that are less favourable to investors, particularly where funding providers are competing to maintain deployment.

That dynamic is now beginning to reverse.

As capital becomes more selective and some funds reduce their participation, the balance of negotiation is shifting back toward reliable, long-term capital partners. We are starting see this not only through improved pricing, but also through the ability to negotiate stronger structures. This includes more conservative advance rates, tighter eligibility criteria, enhanced arrears triggers, stronger reporting requirements and more robust cashflow controls.

For credit investors, this is the more important point. Better terms do not simply mean higher returns. They can also mean better credit quality, stronger downside protection and more attractive transaction entry points. In other words, the improvement is not just in the income profile of new transactions, but in the quality of the risk being taken to generate that income.

Periods where portfolio economics and credit protections improve together are relatively uncommon. They tend to occur when capital is more discerning, competition is reduced and borrowers place greater value on certainty of execution. In those environments, disciplined capital is often able to achieve a better risk-adjusted return without moving up the risk curve.

Matching Scale With The Immediate Opportunity Set

This is also where the structure of a credit manager becomes increasingly important.

In periods of strong inflows, scale can appear to be an obvious advantage. Larger pools of capital provide greater funding capacity and allow managers to participate in larger transactions. However, in credit, scale must ultimately be matched by the availability of opportunities that meet the manager's risk and return requirements.

When capital grows faster than the relevant opportunity set, managers can face increasing pressure to deploy. This can lead to participation in larger transactions, broader mandates or structures where there is less direct engagement with the underlying lender and reduced visibility over asset performance.

The challenge is not necessarily the size of the transaction itself. Rather, it is that larger and more widely syndicated transactions can reduce alignment, limit influence over transaction terms and increase the distance between investors and the underlying source of credit performance.

The Fund continues to focus on a narrower segment of the market where we can partner with a select group of high-quality non-bank lenders and act as a meaningful funding provider. In many cases, this allows us to negotiate transaction specific protections, maintain close visibility over portfolio performance and work directly with counterparties as conditions evolve.

This approach can mean managing capacity carefully and allowing deployment to occur in line with suitable opportunities rather than investor demand alone. We view this as a strength. Credit markets do not reward capital simply for being available. They reward discipline in determining when capital should be deployed, on what terms and with what protections.

Our focus remains unchanged: to deliver a high level of monthly income while targeting capital preservation through disciplined deployment, active monitoring and conservatively structured asset-backed credit exposures.

The Manning Credit Opportunities Fund delivered +1.02% in April and 13.55% over the past 12 months. Since inception, the Fund has delivered an annualised return of 14.57%, continuing to exceed its objective of net returns of over 10% above the RBA cash rate.

Portfolio Evolution

Performance during the month was supported by continued activity across the portfolio, including further utilisation of existing facilities and the commencement of a recently settled transaction with a new lender relationship.

Three existing lenders drew additional funds during the month, reflecting ongoing growth within established counterparties and the continued deployment of capital into existing relationships. Alongside this activity, the Fund also continued working with several lenders on initiatives extending beyond their original financing arrangements, including support for new products and the progression of revised long term funding structures.

While new transaction origination often attracts the greatest attention, a significant portion of the Fund’s activity occurs after a facility has settled. As counterparties grow and mature, opportunities frequently emerge to increase facility sizes, support new initiatives and further strengthen transaction structures and investor protections.

Strengthening Existing Relationships

A key advantage of long term credit partnerships is the ability to participate in the ongoing evolution of a lender’s business. Over time, operational capabilities can improve, governance frameworks can become more sophisticated, technology platforms can be enhanced and funding structures can evolve. These developments often create opportunities to revisit transaction terms and further strengthen the overall credit profile of an exposure.

During the month, one existing facility was extended for a further two-year term following a comprehensive review of both the lender and the transaction structure. The revised arrangement incorporates a number of enhancements designed to support the lender’s continued growth while further strengthening structural protections within the facility.

This aspect of credit investing is often overlooked. While initial structuring and underwriting remain critical, some of the most attractive outcomes can arise from established relationships where familiarity, performance history and operational progress allow both parties to build upon an already successful foundation.

Activity and Opportunity

Transaction activity remains elevated across both existing relationships and prospective opportunities. In a market where transaction volume is increasing and funding conditions remain selective, the Fund continues to benefit from both new opportunity creation and the ongoing strengthening of existing relationships. While much attention is often placed on sourcing new transactions, we believe some of the most attractive risk adjusted outcomes can emerge from established counterparties that continue to improve operationally and strategically over time.

The portfolio continues to perform in line with expectations and we remain focused on disciplined deployment into opportunities where structure, control and pricing appropriately reflect the underlying risk profile of the transaction.

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