TPT Fixed Term Fund - TPT Wealth
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TPT Fixed
Term Fund
QUARTERLY FUND REPORT AS AT 31 MARCH 2021
TPT WEALTH QUARTERLY REPORT | TPT FIXED TERM FUND 1TPT Fixed Term Fund
Performance to Benchmark
Gross Margin to
As at 31 March 2021 Net Return Gross Return Benchmark
Benchmark
3 Months 1.34% 2.52% 0.01% 2.51%
6 Months 1.33% 2.53% 0.05% 2.48%
1 Year 1.50% 2.70% 0.11% 2.59%
3 Years pa 2.34% 3.53% 1.11% 2.42%
5 Years pa 2.59% 3.77% 1.40% 2.37%
Benchmark is the Bloomberg Bank Bill Index.
Note: Returns less than one year are not annualised. Performance is after standard fees and charges as outlined in the Fund’s Product Disclosure
Statement and assumes income is reinvested. Past performance is not a reliable indicator of future performance.
Asset Allocation
Current Asset Allocation - Total Portfolio by Type Allocation Yield WAL (Yrs)
At Call 9.81% 0.04% 0.00
Notice Account 0.16% 0.41% 0.04
Neg. Cert of Deposit 4.47% 0.23% 0.13
Term Deposits 15.88% 0.28% 0.12
Floating Rate Notes 6.85% 0.81% 1.86
Floating Rate Notes - Sub Debt 0.62% 2.46% 5.55
Asset Backed Securities 1.23% 4.61% 1.46
Residential Mortgage Backed Securities 17.57% 2.60% 2.73
External Managed Investment Schemes 3.36% 4.75% 0.00
Commercial Mortgage Backed Securities 7.63% 4.56% 0.57
Bonds 0.92% 0.70% 4.93
Direct Mortgages 31.50% 3.86% 0.00
Total 100.00% 2.37% 0.66
Mortgage Portfolio Arrears Analysis
No. of Loans in Arrears more than 30 days
Grouped in 30 Day intervals
No. of Loan Value of Arrears
Arrears Value of Loans ($)
Accounts ($)
31 - 60 days 0 $0 $0
61 - 90 days 0 $0 $0
> 90 days 0 $0 $0
Total 0 $0 $0
TPT WEALTH QUARTERLY REPORT | TPT FIXED TERM FUND 2Allocation by Type
At
Call 9.81% Notice
Accounts 0.16%
Direct Mortgages
31.50% Negotiable Certificates
of Deposit 4.47%
Term Deposits
15.88%
Bonds
0.92% Floating Rate
Notes 6.85%
Commercial Mortgage Bank Sub Debt
Backed Securities 7.63% (Floating) 0.62%
External Managed Asset Backed
Investment Schemes 3.36% Securities 1.23%
Residential Mortgage
Backed Securities 17.57%
Allocation by Institution Allocation by Institution
Current Asset Allocation - by
Allocation
Institution
Major Australian Banks 19.32% Subordinated
Debt 0.62%
Direct Mortgages Major Australian
Other Australian Banks 17.86% 31.49% Banks 19.32%
Mortgage Backed Securities 25.20%
Asset Backed Securities 1.23% Other Australian
External Managed Banks 17.86%
Investment
Schemes 3.36%
External Managed Investment Schemes 3.36% Asset Backed
Securities 1.23%
Bonds
Bonds 0.92% 0.92%
Mortgage Backed
Securities 25.20%
Direct Mortgages 31.49%
Subordinated Debt 0.62%
Total 100.00%
MyState Group Related Party Investments^
Investment Type Provider Value Allocation
At Call Account MyState Bank $250,000 0.08%
Term Deposits MyState Bank $- 0.00%
Mortgage Backed Securities Conquest Trusts $12,828,662 3.96%
Total $13,078,662 4.03%
^ Related party investments include investments in other TPT Wealth operated managed investment schemes, deposits with MyState Bank Limited
and investments in Australian Residential Mortgage Backed Securities (RMBS) via special purpose vehicles that are related parties to MyState Bank. All
related party transactions are made at market terms on an arms length basis. Percentages may not add to 100% due to rounding.
TPT WEALTH QUARTERLY REPORT | TPT FIXED TERM FUND 3Market Commentary comparatively higher interest rates and recent rebound in iron
The global economic recovery continues albeit, at a staggered ore prices (global increase in infrastructure spending and dam
pace. Expectedly, the level of recovery for advanced and closures in Brazil) continues to support the currency.
developing economies has largely been a function of their ability
to contain the spread of COVID-19. Despite the International Fund Commentary
Monetary Fund (IMF) upgrading the global growth forecast for The Australian economy continues its upward trajectory
the global economy, the pandemic continues to pose significant following continued monetary and fiscal support from the
headwinds to economic growth; most evident in European Reserve Bank of Australia (RBA) and Australian federal
economies which have been severely affected by COVID-19 government. Throughout the quarter, the RBA has reiterated
(such as Italy and Portugal) and economies continuing to its stance to implement unconventional monetary policy tools,
experience an outbreak of infections (such as India). In addition, providing ample liquidity leading to historically low interest
the pace of recovery has been unevenly spread amongst rates. Specifically, the RBA board affirmed its commitment to
industries, with those industries most severely affected (such purchase $100 billion in government bonds (with maturities
as aviation, leisure, media and retail) lagging behind industries ranging from five to 10 years); maintaining the interest rate of
which have benefited from expansionary fiscal policy measures the Term Funding Facility at 0.10%; target yield for three-year
to grow unemployment (such as resources). Australian government bond yield of 0.10% and maintaining
The policy response from central banks and governments the cash rate at 0.10% for as long as necessary. Most notably,
continues to be decisive. Domestically, the RBA has reiterated historically low interest rates and cheaper access to credit
its monetary policy stance to provide an abundance of liquidity has brought forward demand for housing in Australian capital
for small, medium and large businesses in conjunction. Following cities, leading to a strong rebound in capital city dwelling prices
the completion of its initial $100 billion government bond (most notably in detached dwellings). The RBA and Australian
purchase program, the RBA will commence its second round Prudential Regulatory Authority (APRA) continue to monitor the
of government bond purchases of $100 billion. The resulting strong growth and in particular, lending standards. Importantly
effect being has been a rebound in consumer sentiment, for the household sector in Australia, residential property, on
consumer sentiment, labour and green-shoots of inflation average, is the largest source of wealth for many Australians,
(still below the RBA’s target bandwidth of 2 – 3%). Positively, and the resulting ‘wealth effect’ (increase in home equity and
the unemployment rate declined to 5.6% for the March 2021 correlation with increased consumption) is closely monitored
quarter and household national savings declining to 12% (from by the RBA and the multiplier effect it has on the domestic
18.7%). While signs are initially positive as unemployment economy.
rate declined, it is too early to determine the net effect on Despite continued monetary and fiscal support to support
unemployment from the removal of the JobKeeper scheme. the economic recovery through increased liquidity and lower
Of note was the pronounced rise in global government bond interest rates, the TPT Fixed Term Fund, after management
yields. Domestically, Australian 10-Y bond yields continued to costs, delivered a 12-month rolling return of 1.50%. The Fund
rise from its base of 97bps at the start of the quarter, closing continues to deliver competitive returns to investors, remains
the quarter at 181bps. The rise in longer-dated government well-positioned, holding healthy levels of cash and cash
bonds led to a temporary widening of credit spreads, with the equivalents and is primarily exposed to a diversified portfolio of
combination of unconventional monetary policy and strong mortgages, mortgage-backed securities (RMBS) and other asset-
fiscal support from federal governments leading to a potential backed securities (ABS).
resurgence in global inflation. However, inflation tempered The combination of accommodative monetary policy from
toward the end of the quarter as market volatility and repricing the RBA and expansionary fiscal policy from the Australian
of risk abated following concerns about structural shift to rising federal government has led to continued excess liquidity in
inflation (leading to repricing of yields and risk premiums). the wholesale money markets. While acceptance for wholesale
The temporary increase inflation, while positive, can largely deposits from ADIs has rebounded, excess liquidity has led
be attributed to a pronounced deflation in prices during to many ADIs continuing to offer extraordinarily low yields on
2020 (as consumers and business alike experienced shocks to wholesale deposits. Over the quarter, the fund has continued to
their respective balance sheets), with expansionary measures maintain its focus on higher quality floating rate notes (FRNs),
transitorily pushing inflation higher as economic recovery continuing to invest in structured finance securities such as
increased. Residential Backed Mortgage Securities (RMBS), Commercial
At the close of the March quarter, money market yields trended Backed Mortgage Security (CMBS) and Asset Backed Securities
lower and were at new record lows, reflecting extraordinarily low (ABS) structures, with a focus on being higher on the capital
policy rates, reduced demand, and the high level of liquidity in structure and underlying asset quality. Positions initiated in
the financial system. The Australian 3-month BBSW rate finished March included both public primary market and private facilities.
at 0.04%. Yield curves in Australia and the US had broadly similar TPT Wealth expects further deployment into these private
shapes, being relatively flat out to 3 years and upward sloping warehouse facilities are expected to improve fund returns.
at longer maturities. The Australian government 3-year bond TPT Wealth continues to reduce allocation to the Managed
closed at 0.29% and the 10-year bond settled at 1.81%. Credit Investment Scheme the fund is invested in. In addition,
spreads tightened considerably as the (Australian iTraxx index Mortgage origination was offset by loan refinances from the
closed at 63.12bps, well below the crisis peak of 243 bps and fund. New origination pipelines indicate same quality loans
from 76.7 bps last quarter end). The Australian dollar continues with lower yields than previously due to competitive lending
to perform strongly, closing the quarter at $0.7609 against the pressures from ADIs who have access to cheap capital via Term
US dollar. The combination of stronger investor confidence, Funding Facility.
IMPORTANT INFORMATION:
The information contained in this material is of a general nature only and is not personal advice. It does not take into account the investment
objectives, financial situation or particular needs of any individual. Investors should read the Fund’s PDS and other disclosure documents which are
available at https://tptwealth.com.au/ and consider seeking independent professional advice before deciding whether to acquire or continue to hold
the investment.
An investment in the Fund is an investment in a managed investment scheme. It is not a bank deposit and there is a higher risk of losing some or all
of your money than is the case with a bank deposit. TPT Wealth, MyState Limited and MyState Bank do not guarantee the repayment of capital or the
performance of the Fund or any particular rates of return from the Fund.
Please read the Fund’s PDS for information about funds and their risks, withdrawal periods, withdrawal rights and investment periods and terms and
conditions that apply. Please note, that while we expect to meet redemption requests within the periods stated in the Fund’s PDS, these periods may
be longer subject to the nature of the assets of the Fund and the Fund’s liquidity.
TPT WEALTH QUARTERLY REPORT | TPT FIXED TERM FUND 4MANAGED INVESTMENTS | WILLS AND ESTATE PLANNING | COMMERCIAL LENDING
Speak to our experienced team today.
1300 138 044 | tptwealth.com.au
TPT Wealth Limited ABN 97 009 475 629 AFSL 234630 Australian Credit Licence Number 234630.
A wholly owned subsidiary of MyState Limited ABN 26 133 623 962. Registered Office: Level 2, 137 Harrington Street, Hobart 7000 Tasmania Australia.
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