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
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
