SocietyOne launches new investor trust
The Personal Loans Unit Trust is targeting high returns for investors.
Australia's biggest marketplace lender SocietyOne has announced a Personal Loans Unit Trust that aims to give investors an expected return of 6% per annum. The lender is looking to target up to $50 million in assets in its first year, and will provide wholesale investors with a reliable monthly income stream and better liquidity.
The trust will invest in a diversified portfolio of fixed rate unsecured personal loans, and put excess returns into a reserve account that can then be used to keep returns consistent over time. Investors will also gain access to their funds after 12 months, compared with the existing fractionalised option that is fixed for the life of the loan, which can be up to 60 months.
Investors will need a minimum of $100,000 to apply, but will get returns on par with bank hybrids and other trusts, according to SocietyOne. The targeted return of 6% will also come after fees, costs and losses have been deducted.
Mark Jones, SocietyOne CEO, says the new model will improve the overall investor experience. "We believe this new Unit Trust model will help to significantly simplify the experience of investing in our portfolio of personal loans and provide investors with greater access to this asset class, consistent interest payments and enhanced liquidity options after 12 months," he said.
"It's just another example of how we are constantly iterating and improving on our model and mode of delivery in order to achieve our primary goal: providing a superior funding experience for our customers."
John Cummins, chief investment officer at SocietyOne, believes the trust will also open investors to an asset previously reserved for the big banks. "The Unit Trust was designed to provide investors with greater levels of simplicity, access, diversification, and liquidity, while delivering solid and consistent returns," he said.
"Investors will also gain access to a previously unavailable asset class, as banks prefer to keep these assets on their balance sheets due to the strong returns."
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