Monthly Performance Update
The Fund delivered 0.53% in May, 6.22% over 12 months and 6.26% annualised over 5 years, exceeding its RBA cash rate + 5% return target (net of fees) across all time periods. All sectors of the portfolio performed strongly with no material detractors in line with prior periods.
We recently published a paper illustrating the portfolio benefits of Private Debt using the Capital Asset Pricing Model (CAPM) which can be viewed by following the below link.
Benefits of Private Debt to Investment Portfolios
Constructing a portfolio with the singular purpose of maximising returns is like choosing to invest in the bond with the highest yield. Historical research shows that Private Debt serves as an invaluable addition to any portfolio, delivering higher returns and lower risks.
Download the free Research Paper HERE and learn how to unlock the benefits of Private Debt to any Investment Portfolio.
Investment Performance (to 31/05/2021)
Examining the broader economy, we continue to see the ingredients for wider inflation coming to the fore. For example, the recent NAB business survey reported fresh historic high Business Conditions (left-hand chart) and surging employment in a number of sectors such as Mining, Finance, Business and Property and Construction all sharply higher (right-hand chart). With underemployment lower and unemployment only marginally above pre-pandemic levels, we see a scenario where businesses are willing to pay more for labour to capitalise on these business conditions and faced with a limited supply of such labour, offer higher wages feeding broader wage inflation. We see this wage inflation and mobilisation of high household savings as key drivers of increased consumption causing broader inflation.
Looking to Fund assets, we continue to see very strong deal flow coming across the desk providing an attractive opportunity set to select from. While historically consumer loans dominated as a proportion of transactions, we are now seeing more mortgage and business-related opportunities on very favourable terms. Many of these potential transactions are outside our risk appetite although a healthy number show considerable robustness when taking a through the cycle mindset.
Thank you to everyone who reached out following our 5 year anniversary last month, we have been overwhelmed with the response and support for the Manning X AirSeed initiative.
Please get in contact with the team should you have any questions or comments.
Learn more about the private debt asset class
Video – 3 minutes
Flyer – 4 pages