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April Performance Aura High Yield SME Fund

April Performance Aura High Yield SME Fund

Many readers will know Montgomery Investment Management has become the distribution partner for the Aura High Yield SME Fund. Launched in August 2017, the Fund has delivered a compound annual return of 9.72 per cent, after expenses, over the 57 months to April 2022 and 8.65 per cent for the twelve months to April 2022.

Monthly income distribution over the 57 months has varied between 0.93 per cent and 0.62 per cent, and the average distribution is 0.78 per cent per month.

Let us take the month of April 2022 as an example. The Fund commences with a unit price of $1.00, and over the month it receives a return of 0.64 per cent (after expenses). At month-end, the unit price grew to $1.0064 on a cum distribution basis. Once the income is distributed to the unit-holders bank account (or reinvested in more units in the Fund), the unit price falls back to $1.00. 

Brett Craig is Portfolio Manager of the Fund, and he is assisted by James Chapman and Natalie Kolenda.  The Fund is a wholesale offering, as defined by the Corporations Law, with a minimum initial investment of $100,000.  Current ratings include “Very Strong” from Foresight Analytics and “Commended” by Evergreen Ratings.

The Aura High Yield SME Fund lends money via six platforms, with an average loan size approximating $100,000 and the largest loan is currently $1.1 million. The average duration of the loan book is four to six months, with a tiny portion of the loan book exceeding twenty-four months.  The thesis is that the Fund’s underlying distributions should rise if the Reserve Bank of Australia increases its official cash rate – as it did on 4 May 2022 – for the first time since 2010. 

The loan book is largely exposed to NSW, Victoria, and Queensland (46 per cent, 36 per cent and 14 per cent, respectively), and diversified across several industries with agriculture currently accounting for 40 per cent.   

The table below details the types of loans for Small and Medium Enterprises (SMEs), the investment vehicle, the credit support, and the loan security.  

For readers who are interested in the Aura SME High Yield Fund, Brett Craig will be presenting at a webinar on Tuesday 24 May 2022 at 6.30pm and you may wish to register here.

And for readers who are not wholesale investors, we intend launching the Aura Core Income Fund in the next few months, with a minimum initial investment of $25,000.  Loans from this Fund will be higher up the collateral food-chain, and the return objective will be the RBA cash rate plus 3.5 per cent to 5.5 per cent per annum, after expenses.

A company associated with the author has an investment in the Aura High Yield SME Fund.



Units in the Aura High Yield SME Fund (Fund) are issued by Aura Funds Management Pty Ltd (ABN 96 607 158 814, Authorised Representative No. 1233893 of Aura Capital Pty Ltd (ABN 48 143 700 887, AFSL No. 366 230)) (Aura). Aura is the trustee of the Fund and a subsidiary of Aura Group Pty Ltd. This information is for wholesale or sophisticated investors only and is provided by Montgomery Investment Management Pty Ltd (ABN 73 139 161 701, AFSL No. 354 564) as the authorised distributor of the Fund.

An investment in the Fund must be through a valid paper or online application form accompanying the Information Memorandum.

 The information provided is general in nature and does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision you should read the Information Memorandum and (if appropriate) seek professional advice from a licensed financial advisor to determine whether the investment is suitable for you. The investment returns or repayment of capital of the Fund are not guaranteed. The value of an investment may rise or fall and you may risk losing some or all of your capital. Past performance is not a reliable indicator of future performance.


Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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