merry christmas · merry christmas christmas holidays: we close on midday tuesday, 23 december and...

2
THE FACTS SUMMER Newsletter 2014 Your Fund continues to consistently post strong returns. For the quarter ending 31 December 2014 your Fund has returned the equivalent of 4.75% per annum after the deduction of the quarterly running expenses, but before taxation. This return was calculated on an annualised basis using a $1 unit value. Further details about the return and its method of calculation are shown on the reverse. Registered Office of The Manager: Fund Managers Otago Limited Level 5, 165 Stuart Street, Dunedin • PO Box 5741, Dunedin 9058 • Free Phone: 0800 800 212 • Tel: (03) 471 6500 • www.nzmit.co.nz The NZMIT No. 2 Fund is open for investments. Refer to reverse side for footnotes. Return for quarter ending: 31/12/2014 4.75% p.a. 1 Return for past 12 months 4.85% p.a. Compounded return past 12 months 4.97% p.a. 2 RETURNS AT A GLANCE Earnings strengthened significantly during the past quarter on the back of significantly reduced liquidity. Liquidity is down from 44.14% over the winter to 16.93% as at the time of writing this newsletter and will be down to 11% by end of January 2015. Therefore the distribution to investors for the quarter ending 31 December 2014 has improved by 0.10% per annum and is equivalent to 4.75% per annum based on a $1 unit value and is after all expenses of the Fund have been deducted but before taxation. This bodes well for next year with the quarterly return to March 2015 likely to be increased based on current expected income levels. We expect the return to be up on this projected result for the second quarter of 2015 as well. We expect this upward earnings trend to remain for the near to medium future. Demand for new loans remains strong and is spread throughout the country and across all lending categories. We see no reason for the demand for loans to weaken next year and plan to grow the Fund significantly during the coming year after taking a controlled approach to the latter half of 2014 when high levels of liquidity adversely affected earnings. The loan portfolio is particularly sound at this time with only two loans in arrears and one impaired loan. The security behind the impaired loan is currently the subject of a negotiation for sale and we are hopeful of a successful resolution before balance date. The impaired loan is well covered especially as the security value of the assets applicable to this loan clearly exceed the loan value. The improved earnings has allowed the Fund to re-establish a reserve to cover any unforeseen losses. The journey over recent years has been bumpy and we are of the view that the performance over the last six months indicates how much more settled the market has been enabling us to invest in and achieve better overall yields from mortgages. We should be able to settle into a stable period of earnings growth and stability for the Fund. Rest assured that we are constantly monitoring market conditions and ensuring that all new lending is at levels commensurate with the market conditions. The Board, Management and staff of Fund Managers Otago Limited would like wish you all a Merry Christmas and a Happy New Year. Your continued support is greatly appreciated and if you wish to discuss your investment please feel free to call us on 0800 800 212 or to obtain our latest investment statement. QUARTERLY COMMENT FUND MANAGERS OTAGO LTD MERRY CHRISTMAS Christmas Holidays: We close on midday Tuesday, 23 December and will reopen on Monday 12 January

Upload: others

Post on 28-Sep-2020

3 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: MERRY CHRISTMAS · MERRY CHRISTMAS Christmas Holidays: We close on midday Tuesday, 23 December and will reopen on Monday 12 January . important information Investment Portfolio Statistics

THE FACTS SUMMER Newsletter 2014

Your Fund continues to consistently post strong returns. For the quarter ending 31 December 2014 your Fund has returned the equivalent of 4.75% per annum after the deduction of the quarterly running expenses, but before taxation. This return was calculated on an annualised basis using a $1 unit value. Further details about the return and its method of calculation are shown on the reverse.

Registered Office of The Manager: Fund Managers Otago LimitedLevel 5, 165 Stuart Street, Dunedin • PO Box 5741, Dunedin 9058 • Free Phone: 0800 800 212 • Tel: (03) 471 6500 • www.nzmit.co.nz

The NZMIT No. 2 Fund is open for investments. Refer to reverse side for footnotes.

Return for quarter ending: 31/12/2014

4.75% p.a.1

Return for past 12 months

4.85% p.a.

Compounded return past 12 months

4.97% p.a. 2

RETURNS AT A GLANCE

Earnings strengthened significantly during the past quarter on the back of significantly reduced liquidity. Liquidity is down from 44.14% over the winter to 16.93% as at the time of writing this newsletter and will be down to 11% by end of January 2015. Therefore the distribution to investors for the quarter ending 31 December 2014 has improved by 0.10% per annum and is equivalent to 4.75% per annum based on a $1 unit value and is after all expenses of the Fund have been deducted but before taxation. This bodes well for next year with the quarterly return to March 2015 likely to be increased based on current expected income levels. We expect the return to be up on this projected result for the second quarter of 2015 as well. We expect this upward earnings trend to remain for the near to medium future.

Demand for new loans remains strong and is spread throughout the country and across all lending categories. We see no reason for the demand for loans to weaken next year and plan to grow the Fund significantly during the coming year after taking a controlled approach to the latter half of 2014 when high levels of liquidity adversely affected earnings. The loan portfolio is particularly sound at this time with only two loans in arrears and one impaired loan.

The security behind the impaired loan is currently the subject of a negotiation for sale and we are hopeful of a successful resolution before balance date. The impaired loan is well covered especially as the security value of the assets applicable to this loan clearly exceed the loan value. The improved earnings has allowed the Fund to re-establish a reserve to cover any unforeseen losses.

The journey over recent years has been bumpy and we are of the view that the performance over the last six months indicates how much more settled the market has been enabling us to invest in and achieve better overall yields from mortgages. We should be able to settle into a stable period of earnings growth and stability for the Fund. Rest assured that we are constantly monitoring market conditions and ensuring that all new lending is at levels commensurate with the market conditions.

The Board, Management and staff of Fund Managers Otago Limited would like wish you all a Merry Christmas and a Happy New Year.

Your continued support is greatly appreciated and if you wish to discuss your investment please feel free to call us on 0800 800 212 or to obtain our latest investment statement.

QUARTERLY COMMENT

FUND MANAGERS OTAGO LTD

MERRY CHRISTMAS

Christmas Holidays: We close on midday Tuesday, 23 December and will reopen on Monday 12 January

Page 2: MERRY CHRISTMAS · MERRY CHRISTMAS Christmas Holidays: We close on midday Tuesday, 23 December and will reopen on Monday 12 January . important information Investment Portfolio Statistics

important information

Investment Portfolio Statistics

Fund Size $13.7M

Unit Price $1.00

Number of Investors 737

Minimum Investment $500

Income Payments Quarterly / floating rate of return / income can be compounded

Term of Investment Medium to long term

Entry fees Nil

Exit feesThe Manager has discretion to charge a fee of up to 2% on any money withdrawn less than 12 months after investment and up to 1% on any money withdrawn more than 12 months but less than 24 months after investment.

Liquidity as at 05 December 20145 16.93% ($2.3M)

Redemption notice period the maximum of 90 business days (approximately 4.5 calendar months).

Mortgage Portfolio Statistics

Number of Mortgages 73

Value of Mortgages $11.49M

Average Mortgage Size $157,364

Portfolio Commercial Mortgages 22%

Portfolio Residential Mortgages 72%

Portfolio Farming Mortgages 6%

Geographic Spread: North Island 37%

Geographic Spread: South Island 63%

No. of Loans in Arrears at 30-90 days 3

No. of Loans in Arrears at 90 days + Nil

No. of Impaired Loans 1

crea

tive

7048

1. The ‘Return for the quarter’ displayed above for the NZ Mortgage Income Trust No. 2 Fund is based on a $1 unit value and on an investor being in the Fund for the entire quarter ended 31 December 2014 and is before tax but after fees and expenses have been deducted and is expressed as a per annum equivalent before tax. Any investor who joined the Fund or withdrew from the Fund during the quarter would not necessarily earn the same return. 2. The ‘Compounded return past 12 months’ displayed above for the NZ Mortgage Income Trust No. 2 Fund is based on an investor being in the Fund for the entire year ended 31 December 2014 and having elected to have their quarterly income reinvested in further units and calculated before tax but after fees and expenses have been deducted and expressed as a per annum equivalent before tax. 3. The NZ Mortgage Income Trust No. 2 Fund’s details of the return calculation is set out in the Registered Prospectus and on the NZMIT website. 4. Past returns do not guarantee future performance in respect of the NZ Mortgage Income Trust No. 2 Fund. 5. The liquidity percentage is that percentage of the total assets of the Fund held in cash or liquid assets. 6. All information in this newsletter is current to 10 December 2014, unless otherwise stated and the figures for the period commencing 1 April 2014 have not yet been audited. 7. For further information please contact our office to obtain a copy of the current NZ Mortgage Income Trust No. 2 Fund Investment Statement and/or Prospectus or contact your adviser.

Fund Facts