Andrew Lockhart

To meet investors’ increasing demands for regular income, Australia’s leading non-bank corporate lender Metrics Credit Partners (Metrics) announced a change in distribution policy for its MCP Income Opportunities Trust (ASX MOT), with distributions now paid on a monthly basis.

The first of the monthly distributions will be paid in early November for the month of October 2019.

Metrics’ Managing Partner, Andrew Lockhart, said: “Obtaining consistent income in today’s record low interest rate environment is a challenge for investors”.

“Investors who rely on earning interest from their savings were the biggest losers when the Reserve Bank of Australia (RBA) cut rates to a record low in October, prompting banks to slash interest from cash accounts, term deposits and savings accounts.

“To top it off, in bond markets, investors are paying higher prices for declining yields, with Australian government bonds generating less than 2% and corporate bond yields continuing to fall. Overseas, negative rates mean some investors are paying to own bonds.”

Mr Lockhart said by moving just slightly along the risk curve from bank term deposits and government bonds, investors can obtain reliable returns between 4 -10% a year from the corporate loan market.

“Corporate loans have a low correlation to other major asset classes including equities, government bonds, hybrids and term deposits, providing an excellent source of portfolio diversification for investors,” he said.

“The use of floating rates provides protection against inflation while listed funds give investors the added benefit of liquidity.”

Until recently, a key issue for many investors has been accessing the corporate loan market, which has traditionally been dominated by the big four banks.

To address this issue, Metrics was the first corporate loan lender in Australia to list an investment trust (LIT) on the ASX in 2017, providing investors with access to a diversified portfolio of corporate loans.

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