Why Invest in a Mortgage Fund?

Regular and reliable income is an important part of all investors’ portfolios. In particular, it can be useful for investors at particular life stages. The certainty of knowing your expected rate of return at the commencement of your investment can make the Allied Direct Fund a very attractive investment proposition for investors.

Other features that make mortgage funds attractive to investors:

  • Reliable monthly income;
  • All funds invested in first registered mortgages or cash;
    Average LVR 60%; and
  • 100% fixed rate loans, your expected return is known at the time of your investment.

Mortgages vs. Term Deposits

Features Mortgage investment Term Deposit
Income source Fixed rate of interest paid by borrower on mortgage Fixed rate of interest paid by the issuer, usually a bank
Regular Income YES - Income paid monthly to the investor NO - Interest is only paid on maturity
Stable capital value YES YES
Security Backed by underlying asset i.e. property and any further security as required Individual bank issuer balance sheet
Credit risk Carefully assessed and backed by registered first mortgage and further security if applicable Sovereign risk and event risk
Return (yield) Higher than cash investments Lower than mortgage funds

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