This media release was originally published by Australia Ratings on 17 November, 2020. It is reproduced here in full without amendment. 

Australia Ratings Analytics (Australia Ratings) has reviewed two funds managed by Trilogy Funds Management Ltd (Manager), the Trilogy Enhanced Income Fund (TEIF) and the Trilogy Monthly Income Trust (TMIT) (together, the Funds).

Following the review, both Funds have been upgraded to VERY STRONG. A VERY STRONG rating is the second highest rating in Australia Ratings’ scale and is used to indicate a very strong level of confidence that the Funds can deliver a risk-adjusted return in line with their investment objectives.

TEIF was assigned a Product Complexity Indicator (PCI) of BLUE, which is used to designate the view that the Fund is a RELATIVELY SIMPLE financial product. This indicates that the strategies used to outperform the Fund’s benchmark may include use of very liquid derivatives.

TMIT was assigned a PCI of YELLOW, which denotes the view that the Fund is a COMPLEX financial product, indicating that underlying assets require specialist investment skills to acquire and to monitor. In addition, investment in TMIT is effectively illiquid and investors should have a good understanding of the term and characteristics of the redemptions from this type of fund.

Both TEIF and TMIT are available to retail and wholesale investors.

TEIF, established in November 2016, invests in cash, cash-style investments and other financial assets, including underlying fixed income funds. The Fund aims to deliver competitive income in excess of a target benchmark of the RBA cash rate plus 1.5%p.a. This objective is supported by an investment in the Trilogy Monthly Income Trust.

TMIT, started in February 2007, invests primarily in registered first mortgage loans over property development, construction, and refinancing of completed stock. TMIT aims to provide a stable monthly income stream through investment in a diverse portfolio.

Australia Ratings’ analyst, Maggie Callinan, says “the upgraded ratings reflect the consistent performance throughout the COVID crisis, and both the diversification and the high degree of management oversight of the portfolio”.

She added, “the ratings also indicate the high level of confidence Australia Ratings has that the Funds will continue to deliver a strong risk-adjusted return”.

Learn more about Australia Ratings’ investment rating process and definitions >