In its annual Mortgage Trust Sector Review, SQM Research released a number of findings relating to the Australian mortgage trust market in 2013.
The year was a relatively quiet one for the sector, with “minimal high profile collapses or fund closures”, the report found, although it singled out LM Investment Management as a significant exception.
The report found that “unlike in 2007, very few conventional mortgage trusts…remain open for investment” but that at the same time, “surviving mortgage trusts are now starting to experience modest fund flows as evidence in 2013”.
In addition, the mortgage sector was “dominated by very unique and distinct mortgage funds offering different structures and underlying exposures” in 2013, the report noted.
“As we have stated a long time ago, the sector has a future and now there is solid evidence that investors are becoming increasing confident of that future with funds under management growing for those rated trusts that are actively open for deposits,” SQM managing director Louis Christopher said.
“What few realise too is that risk-adjusted returns in the sector have been better than most other asset classes over the past five years,” he said.
“Some funds in this space have been thriving and that is because they proved their worth through the very difficult market conditions of 2008.”
