A quick and easy guide to this emerging income asset class
Investors who have taken a balanced approach to income investing face a bittersweet outlook. On the one hand, the key Australian fixed interest benchmark is up 3.21% year-to-date as RBA rate cuts and pandemic-induced volatility lifted bond prices. Meanwhile equities have tumbled 15% with the additional bugbear of steep dividend cuts. The reality for both asset classes is that yields are going to be lower for some time given the outlook for monetary and economic outlook.
In our latest Expert Insights interview we put the spotlight on an alternative asset class that can be considered for high yield: small-to-medium (SME) business loans. Brett Craig of Aura Group specialises in this sector and targets annualised returns of 10-12% while seeking to preserve capital. Here, he introduces SME debt capital and the opportunity on hand to generate income.
The Aura High Yield SME Fund aims to provide stable monthly income from a diversified portfolio of debt securities, principally issued by lenders to SME businesses in Australia.
MORE ON Fixed Income
1 contributor mentioned