Trilogy Trusts assigned ‘STRONG’ Investment Rating by Australia Ratings


Australia Ratings Analytics (Australia Ratings) has reviewed two Trilogy Funds; the Trilogy Monthly Income Trust and the Trilogy Enhanced Cash (Trust). Both funds have been rated as STRONG. A rating of STRONG indicates a strong conviction that the Fund can deliver a risk-adjusted return in line with the Fund’s investment objective.

The Trilogy Monthly Income Trust has been also assigned a Product Complexity Indicator of YELLOW to designate the view that the Fund is a COMPLEX financial product. This is an indication that the underlying assets require specialist investment skills to acquire and to monitor. In addition, investment in this Fund requires careful management of investor redemption requests as the core assets have limited liquidity. Investors should have a good understanding of the term and characteristics of the distributions from this type of fund.

The Trilogy Monthly Income Trust is a pooled mortgage trust which was established in February 2007. The underlying investments are loans secured by first mortgages over property development, construction, and refinancing of completed stock. Since inception in 2007, the Trilogy Monthly Income Fund has paid a distribution every month, has honoured all withdrawal requests, and has maintained a stable unit price of $1.00. Five year performance to 30 September 2019, was 7.88% p.a net of fees.

Trilogy Enhanced Cash has been assigned a Product Complexity Indicator of BLUE to designate the view that the Fund is a RELATIVELY SIMPLE financial product. This is an indication that, while the fund is expected to move fairly closely in line with mainstream markets, there may be periods where it outperforms or underperforms.

Trilogy Enhanced Cash is an open-ended registered investment scheme, which was established in November 2016. The underlying investments are targeted at 70% for cash and cash-style products, including underlying enhanced cash funds and mandates, and 30% investment in the Trilogy Monthly Income Trust. Trilogy aims to hold the unit price of Trilogy Enhanced cash at $1.00, by calculating, allocating and distributing interest and other income at the end of each month. Performance since inception to September 2019 has been 4.13% p.a net of fees.

Trilogy Funds Management Limited had its origins in 1998 when a Brisbane law firm, of which Philip Ryan was a partner, commenced an investment company managing mortgages and property assets. This company was acquired in 2004 by interests associated with the present management when Rodger Bacon and John Barry left their positions at Challenger Financial, where they were Executive Directors of either Challenger or its subsidiaries.

Australia Ratings’ analyst, Maggie Callinan, said “the rating reflects the experience and track record of Trilogy Funds Management and their expertise in managing CRE lending.” She added “the rating also indicates the high level of confidence Australia Ratings has that the Fund will continue to deliver a strong risk-adjusted return”.

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