Syndicated mortgages: Aspects to consider

    Ahead of the launch of our new syndicated mortgage fund, here are some features of this investment type to bear in mind:

    1. Syndicated mortgages are most suitable for those who desire control.
    In a syndicated mortgage fund, investor capital is tied to the performance of the specific loan the investor has selected to invest in.
    Investors must review the individual investments to determine if a loan aligns with their investment objectives. For this reason, syndicated mortgages often require a higher minimum investment amount than other investments to appeal to more experienced investors.

    2. Syndicated mortgages are subject to a lack of diversification.
    Each Mortgage Investment contains only one Loan. Investors will only achieve diversification if they invest in more than one Mortgage Investment. The more diversified an investor’s loan portfolio is, the lower the risk generally that an adverse event affecting one borrower will impact on the overall investment of the investor in mortgages.

    3. Every loan is unique.
    Every loan will have different characteristics. The mortgage may be for an industrial or residential development and could be in progress or it may be complete and pending sale. Each loan will also differ with regard to the interest rate paid, the loan-to-valuation ratio and the investment term. It is important to understand all of these characteristics and how they can affect your capital and returns.

    4. Syndicated mortgages are illiquid.
    Once invested in a mortgage, investors typically cannot withdraw until the loan repays. However, progressive repayments from the borrower may occur during the term of the loan, offering some liquidity.

    Syndicated mortgages have the potential to deliver attractive returns to investors. However, the nature of this investment requires scrutiny to ensure it aligns with investor’s objectives.


    Disclaimer: While every effort is made to provide accurate and complete information, Trilogy Funds does not warrant or represent that the information in this newsletter is free from errors or omissions or is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Trilogy Funds accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omissions or misrepresentation in information. Note: All figures are in Australian dollars unless otherwise indicated. This information is issued by Trilogy Funds Management Limited (AFSL 261425) and provides general information only. It does not provide financial product advice nor is it an offer of securities. Applications may only be accepted by completing the applicable application accompanying the relevant PDS. If you require personal advice on the suitability or other aspect of this investment, consult a licensed adviser, who will conduct an analysis based on your circumstances. Past performance is not a reliable indicator of future performance. Past performance is not a reliable indicator of future performance. Mortgage trusts are not bank deposits and are not government guaranteed.

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