Annualised returns for the Quarter ending were: 30 June 2018 Return is before tax and after fees and expenses. Past returns do not guarantee future performance. *PIE Fund effective return is calculated based on a taxpayer paying tax on non PIE income at 33% *PIE Fund 5.86 % PA Group Investment Fund and PIE Fund 5.45 % PA INVESTMENTS | PROPERTY FINANCE First Mortgage Trust - Toll Free 0800 321 113 [email protected]| www.fmt.co.nz First Mortgage Managers Limited, the issuer, is not a registered bank under the Reserve Bank of New Zealand Act. Risk and returns between our investments and bank fixed term deposits are different. For a copy of our Product Disclosure Statement call 0800 321 113 or visit our website – www.fmt.co.nz Hello and welcome to our new look newsletter. I am very pleased to report that our investor return has increased. This has been achieved through an increase in good lending opportunities. For the June quarter, 1st April to 30th June 2018: 5.45% pa Group Investment Fund and PIE Fund. 5.86% pa PIE Fund – effective rate for 33% tax payers. When comparing our investment return to the major Banks' 6 to 12 month fixed term deposit rates, you are likely to find we are achieving around a 2% higher return for our investors. That equates to around a 60% higher return. While you cannot directly compare an investment in a New Zealand Trading Bank to one in First Mortgage Trust (due to the different risk profiles of each investment), considering all our investments are either secured against first registered mortgages or held in cash deposits with New Zealand Trading Banks, I think First Mortgage Trust provides an investment option that is hard to beat. I am firmly of the belief that the Fund has never been more resilient or in a better position than where it is today, particularly considering our track record and 22 year history. At the time of writing this report, I am preparing for our annual investor meetings. It is my 13th year at the helm of First Mortgage Trust and presenting on the Fund's position and performance. We have had an incredible response to our invitations to attend this year's presentations, with record numbers FROM THE CEO confirmed for all venues. I am anticipating attendance at our Tauranga presentation will exceed 500. I will report on this in my next newsletter. As not everyone is in a position to attend, I thought I would use this newsletter to cover the key messages in my presentation. Two key messages – resilience and performance: l By resilience, I mean our core conservative and cautious values. l By performance, I mean our results - what we have achieved based on these values. The resilience of the Fund is demonstrated by the quality of the loans we hold against your investment in the Fund. In the last financial year (1st April to 31st March 2018), out of over 620 loans there was only 1 loan where the Fund did not receive all of the interest due. The loss of interest, not investor capital, was $56,000 against a total loan portfolio of $525 million. This loss was covered by the Reserve Fund. Moreover this was the 4th consecutive financial year end where we reported zero non – performing loans. I think you would agree this is a credible and enviable result. We continue to maintain what is regarded in the industry as a conservative lending policy. This is commonly referred to as lower loan to value ratios. We take a relatively conservative approach in the way we manage the business. It is important to us that borrowers have a good deposit or equity in the property we lend on. Our investment policy is to lend on properties throughout New Zealand, but with a focus on properties within the Bay of Plenty, Waikato and Auckland regions. These regions have traditionally held or increased property values and generally support growth, have employment opportunities and strong GDP. The resilience or quality of our loan portfolio is supported by a mix of residential, commercial, rural and development loans. Now to performance: In the last financial year (1st April 2017 to 31st March 2018) we returned $30 million to our investors. I have included a graph to best demonstrate our quarterly returns compared to the average Bank 6 month term deposits for the same period. The return to investors in our Fund for this period was 5.31% per annum, an effective return of 5.71% per annum for those investors in our PIE fund with a personal income tax rate of 33%. The average Bank 6 month deposit rate for the same period was 3.28%. The numbers speak for themselves. I want to assure you; These results have not been achieved through dealing in higher risk loans – far from it. I reiterate the fund had zero non-performing loans at our financial year end. We intend to maintain this position. The fundamental difference, and what underpins our higher return, is how and what the Manager of the Fund charges investors compared to banks. Kind regards Tony Kinzett – CEO First Mortgage Managers charges a management fee to manage the Fund. All returns in excess of the fee are generally paid to our investors. Banks are margin takers. That is, they take the difference between what they offer investors and charge borrowers. This is significant to our performance and why First Mortgage Trust's return is substantially higher. Looking to the future. We look ahead with confidence. Our view is the property market in New Zealand is stable and values have generally been maintained. Confidence in property and good lending opportunities remain steady. This should result in the continuation of consistent returns to our investors. At our investor meeting, attendees will be offered the opportunity to ask questions. I extend this opportunity to those of you that have been unable to attend. Please feel free to call me or one of our management team to discuss any questions you have. Thank you for your continued support of the Fund.
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INVESTMENTS | PROPERTY FINANCE · Return is before tax and after fees and expenses. Past returns do not guarantee future performance. *PIE Fund effective return is calculated based
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Transcript
Annualised returns for the Quarter ending were:30 June 2018Return is before tax and after fees and expenses. Past returns do not guarantee future performance. *PIE Fund effective return is calculated based on a taxpayer paying tax on non PIE income at 33%
First Mortgage Managers Limited, the issuer, is not a registered bank under the Reserve Bank of New Zealand Act. Risk and returns between our investments and bank fixed term deposits are different. For a copy of our Product Disclosure Statement call 0800 321 113
Sam ShergoldFirst Mortgage Managers Limited (the Manager of First Mortgage Trust) has sponsored the
following person. This is not a cost to FMT investors – it is funded by the Manager.
*NB Where donations are made by the Manager, these do not come out of investor funds.
Donations are paid for by the Manager although in the name of First Mortgage Trust.
The event was set for excitement as a
solid 3-6ft surf fluctuated throughout
the 3 days of competition.
I came away from one of my best
nationals after finishing with gold in the
Board Relay, Ski Relay, Taplin Relay and
Rescue Tube Rescue and a bronze in the
Double Ski. Although many other finals
were made in both individual and team
events, I couldn't manage to grasp more
medals . As a sur f c lub, Mount
Maunganui came away with the
winning title for the sixth consecutive
year, creating history.
Since March I have enjoyed some down
time surfing and relaxing with friends
before setting goals for the next targets. I
have taken the opportunity to improve
my cooking skills while also trying to
add more healthier options that fuels my
body better and is ultimately less
processed food. Although you win
some, you also lose some and learn, just
like sport.
This year the ISA World SUP and prone
paddleboarding Championships are
held in Brazil during November. If I were
to be selected for this team it would be
my fifth year in the NZ team, having
medalled every other year.
Thank you
Sam Shergold
The 2018 summer season of racing finished in the
middle of March when the Surf Life Saving
National championships were held at Midway
Beach, Gisborne.
Tauranga Intermediate Boys Cricket (TIBC)
Numerous lead up games are
required to be played and won, to
advance towards the ultimate goal of
going to Christchurch in November.
Tauranga Intermediate School has a
long and impressive record in cricket
as being very competitive. In
February and March this year the
school cricket team earned the right
to compete in a local tournament of
20/20 cricket comprising of five Bay
of Plenty teams, with the winning
team to progress to the next stage
towards playing in Christchurch.
The other Intermediate schools
represen ted were Otumoeta i
(Tauranga), Bethlehem (Tauranga),
Whakatane, and John Paul College
(Rotorua).
After TBIC had beaten the four other
teams, a final was then played against
Otumoetai with TIBC once again
being victorious and earning the right
to become the Bay of Plenty 2018
Intermediate Schools representative
team.
The next s tage was a fur ther
tournament of 20/20 cricket against
five intermediate school teams
representing (1) Kamo – Northland,
(2) Pukekohe – Counties Manukau,
(3) Berkley – Hamilton, (4) St Peters –
Waikato Valley and (5) Gisborne –
Poverty Bay.
It was very pleasing for everyone
involved with TIBC that they once
again won all five games and are now
the Intermediate schools Northern
Dis t r ic t s represen ta t ive team
t rave l l ing to Chr i s tchurch in
November.
The players, coaching team, families
and supporters are extremely
appreciative that First Mortgage
Managers have kindly agreed to
sponsor the team uniform and playing
gear.
Amongst Intermediate schools there is
an intense determination to represent
their province in a New Zealand wide
tournament held each year in
Lincoln, Christchurch, based at the
NZ Cricket Academy.
Northland 2% Auckland 59%
Bay of Plenty 15.5%Waikato, Coromandel& King Country 8.5%
Taranaki 0.5%
Hawkes Bay 1%
Wellington 4.5%
Marlborough 0.5%
Otago 0.3%
Canterbury 6%
Southland 0.5%
Manawatu & Wanganui 1.5%
Tasman 0.1%
Nelson 0.1%
Residential56%
Bank Deposits18%
Rural 11%
Commercial15%
INVESTMENTS BY TYPELOANS BY REGION
As the Manager of the Fund we have aimed to continue our conservative position. The Fund has been managed to maintain a spread and mix of quality property as securities for our loans. The map and
graph providing detail of Loans by Region and Investments by Type as at 6 June 2018 demonstrate the diversity of First Mortgage Trust.