What is a “mortgage trust”?
Under Angas’s traditional fixed-interest-security model (formerly referred to as “debentures”), an investor would make a secured loan to Angas Securities. “Debenture” simply means “secured loan”. Angas Securities became the legal and beneficial owner of that money, subject to a legal obligation to repay the money to the investor with a fixed interest coupon. Significantly, ownership of the money passed from the investor to Angas Securities. Under a mortgage trust, there is no transfer of ownership. The money remains in the ownership of the investor. It is pooled with money owned by other investors and invested in mortgages originated and managed by Angas Securities.
What do you mean when you say that APIF is “unitised”?
Investors share in the income generated from APIF in proportion to their investment. APIF is unitised, meaning an investor is issued with units in the fund with a face-value of $1.00 per unit. Each investor’s interest in APIF is a fractional and beneficial interest in the whole of the fund. It is not an interest in any particular investment of APIF or in any specific APIF asset.
What is a “managed investment scheme”?
This is a statutory structure introduced by amendments to the Corporations Act in 1999. APIF was established in 1984 and operated for 15 years under general trust law. That law still stands today but specific law now applies to managed investment schemes, including this mortgage trust. It is designed to protect investors and ensure that the mortgage trust is operating honestly and efficiently.
What is a “product disclosure statement”?
The traditional Angas Securities investment product required a prospectus to be lodged at ASIC and updated every year. The prospectus regime does not apply to a managed investment scheme. Instead, Angas Prime Income Fund has a product disclosure statement (PDS). The PDS sets out the terms and conditions of the investment, including disclosure made against the benchmarks and disclosure principles in ASIC's Regulatory Guide 45.
What do you mean by “target rate”?
APIF is not a fixed-interest investment. APIF provides investors with a target rate of return from a pool of loans secured by registered first mortgages. Investor monies are pooled together and invested collectively. Each investor has a proportionate share in the entire mortgage portfolio rather than a specific interest in any particular APIF mortgage. APIF does not warrant to deliver a fixed-rate of return. APIF has a target rate. The ability to achieve this target rate is enhanced through the use of a dedicated reserve account. This means that APIF does not have to rely solely on borrower performance in order to meet its distributions to investors each month.
What are “income distributions”?
Angas distributes income to investors. It does not pay interest. Income is paid to investors by direct credit to the investor’s nominated bank account monthly. Income distributions are not guaranteed.
What is APIF’s investment term and how do I withdraw my investment?
An investor’s initial investment will be available for withdrawal 12 months from the end of the month in which it was lodged. For example, an investment lodged on 7 April 2014 will be available for withdrawal on 30 April 2015. Each investor has a right to make a withdrawal request at the end of each 12-month period. An investment will be rolled automatically for a further 12-month investment period unless prior notice is given to Angas by the investor in the manner prescribed in the product disclosure statement.
What is the “dedicated reserve account”?
APIF will maintain a dedicated reserve account in order to support distributions and meet capital losses on individual assets that APIF may incur from time to time. Any funds in the dedicated reserve account as at 30 June each year will be distributed to Angas.