Only four out of 17 mortgage funds still active
Only four out of 17 Standard and Poor's (S&P) rated mortgage funds have active ratings, nearly four months after being placed 'on hold' after the Government bank guarantee led to a spike in redemptions and a redemptions freeze in the mortgage sector, according to S&P's review of mortgage funds.
Only three mortgage funds have been able to maintain their original redemption provisions. S&P has applied ratings to those funds and has resolved one 'on-hold' rating after the manager said a permanent product structure change had been introduced to offer limited redemptions on an ongoing basis.
The continuing freeze comes at a time when there is an increased likelihood for outperformance relative to benchmark in the mortgage sector, according to Peter Ward, a fund services analyst at S&P.
Ward said while the Investment and Financial Services Association was working with fund managers to find a solution to the redemptions freeze, there was no quick fix.
“This situation has come at a time when competition for mortgages has dissipated and higher lending margins and better loan terms, including lower gearing, are available,” Ward said.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
