Residential Mortgage Backed Securities – La Trobe 12 month term account

Hi Tim,

We’ve not invested in La Trobe products before, although they operate out of the same building as we do! From our understanding, these are more vanilla sort of products, variable in nature, underpinned by residential and commercial mortgages.  A manager who we have dealt with, and rate highly in this space is Realm Investment House.

The main different with La Trobe and others in this space is liquidity. We like having liquidity in our portfolios and not having to request redemptions and so forth, that during times of stress, can prove difficult i.e. they can be rejected by the manager. Therefore, we have a preference for listed securities, such as the Perpetual Credit Income Trust (PCI) we hold in the Active Income Portfolio which is a mixture of fixed income, RMBS and private credit. By also holding bonds in the underlying portfolio, it is far more liquid than a straight private credit or RMBS fund.

We still like hybrids, but right here, we do have a preference for bank bonds/subordinated notes and high-quality corporate debt (bonds) which are available in the over the counter (OTC) market via a bond broker.