Investor’s Update—April 2026

We’re back with another ASCF investor’s update, analysing all the key economic and investment trends from the past month, from the Federal Budget, to RBA prospects, to the property market and beyond.

You can catch up with past investor’s updates on the ASCF Blog. If you would like to receive these updates monthly via email, you can sign up to receive an Investor Pack here.

Trading Update

As forecasted in our previous newsletter, the RBA again increased the official cash rate by 25 basis points to 4.35% at their meeting earlier this month. 

Inflation & Employment Markets

Notably, the CPI rose by 4.2% in the 12 months to April 2026, which was less than expected, down from 4.6% in the 12 months to March. In seasonally adjusted terms, this represents a 0.1% monthly decline, with transport (-2.7% MoM) being the primary contributor, driven by the government’s reduction of the fuel excise. 

The trimmed mean rose to 3.4% in the 12 months to April, up from 3.3% in the 12 months to March, while unemployment climbed to 4.5% in seasonally adjusted terms in April, up from 4.3% in March. This marks the highest seasonally adjusted unemployment rate in Australia since November 2021. 

Future Prospects

The RBA will next meet on June 16th, with the Big Four banks all forecasting a hold, though they remain divided in their long-term outlooks. 

Initially, NAB adopted the most hawkish stance, forecasting another rate rise in June. However, after April’s unemployment data came in higher than expected, they have revised this forecast, and now expect the RBA to hold in June before raising rates again in August, as they believe “there is now less urgency for the RBA Board to lean more firmly against inflation risks.”

Westpac also expects the Board to hold in June, but maintains a delayed tightening bias. After initially predicting rate rises in May, June, and August, they now expect the Board will hold in June, followed by two further rises in August and September, reflecting “the RBA’s appetite to continue the current pace of tightening in the current uncertainty.” 

On the other hand, ANZ and CommBank have adopted a neutral bias, with both expecting the Board to hold in June and into the foreseeable future. CommBank specifically forecasts the RBA will “be on hold for the remainder of 2026”, given “the Board now has space to monitor the economic impact of the conflict in the Middle East.”

Our internal view is that the RBA is now firmly on hold, with inflation likely to moderate further as a consequence of both reduced consumer spending and business investment due to uncertainty created by the ongoing tensions in the Middle East and the recent budget announcements. 

Investor Rates

In light of the recent RBA rate increases, we are pleased to advise that, from June 1st 2026, we will be increasing our targeted distribution rates across select terms in our ASCF High Yield, Select Income, and Premium Capital Funds. The ASCF Private Fund targeted distribution rates will remain unchanged.

Please find our new targeted distribution rates below, which will take effect from June 1st:

Sources: Australian Fund Monitors, Bloomberg, Investing.com 
Note 1: Premium Capital Fund began in February of 2020
Note 2: Past performance is not indicative of future performance.

To learn more, see our Investor FAQs.

Lending Activity Update

In April, inquiry levels were encouraging with $32,257,996.80 in loans settled.

The unit price across all three of our retail funds remains at $1.00 per unit.

All monthly distributions have been paid in full for April.

To learn more, see our Borrower FAQs or see our Loan Summary as at 30th April 2026.

ASCF Review of the Federal Budget

The 2026/27 Federal Budget has delivered one of the most significant changes to Australian property investment policy in decades, with major reforms proposed to negative gearing and capital gains tax concessions. For many investors, this may significantly change the risk versus reward equation of owning residential investment property.

Under the proposed changes, negative gearing on established residential properties purchased after budget night would effectively be removed from July 2027, while the long-standing 50% capital gains tax discount would move to a more limited, inflation-indexed system. Existing investments would be grandfathered; however, future investors may face a very different landscape.

For investors, these changes may strengthen the appeal of Australian pooled mortgage funds. Unlike traditional property investment, pooled mortgage funds are not reliant on speculative capital growth or tax concessions to generate returns. Instead, returns are primarily driven by interest income earned from loans secured against Australian real estate assets. This creates a different investment proposition—one focused on diversification and risk management rather than relying on rising property prices.

Historically, many residential property investors accepted low rental yields and negative cash flow because tax benefits and future capital gains helped justify the strategy. With those concessions now being reduced, investors may increasingly question whether committing large amounts of capital to a single residential property remains as attractive as it once was. A pooled mortgage fund can offer several advantages in this environment, including:

Focus on Targeted Income Distributions

Mortgage funds generally aim to provide targeted distributions generated from mortgage interest payments. In today’s higher interest rate environment, this can provide an investment alternative without many of the ongoing costs associated with direct property ownership, such as maintenance, insurance, rates, vacancies, and property management expenses.

Diversification Across Multiple Loans

Rather than relying on the performance of a single property, investors gain exposure to a diversified portfolio of secured loans, which can help reduce concentration risk.

No Tenant or Property Management Issues

Pooled mortgage fund investors are not responsible for the day-to-day administration, repairs, vacancies, and rising holding costs commonly associated with direct property ownership.

Reduced Dependence on Capital Growth

Traditional property investment in Australia has often relied heavily on long-term house price growth. If these reforms reduce future property price growth, returns may potentially become more income-dependent than growth-driven. Mortgage funds, by comparison, are structured as primarily income-focused investments.

Improved Accessibility 

Investment properties often require large deposits, stamp duty, and significant leverage. Pooled mortgage funds can offer lower entry points and defined investment terms compared to the multi-year commitment often required for direct property.

Benefiting From Higher Interest Rates

Higher interest rates have increased borrowing costs for property investors, placing pressure on negatively geared strategies. However, those same higher rates can support targeted income returns within mortgage funds, particularly where lending remains conservatively structured and secured by Australian real estate.

The combination of reduced tax incentives, slower projected property price growth, and elevated holding costs may represent a turning point for traditional residential property investment in Australia. While direct property ownership will likely remain part of many investment portfolios, pooled mortgage funds are emerging as a consideration for investors seeking an option backed by Australian real estate security.

Want to learn more? Contact us to explore your investment options.

Important information: Since inception, all investors have received their targeted distribution rate monthly and all redemption requests have been paid on time and in full, however past performance is not indicative of future performance. Distributions are not guaranteed nor a forecast. Lower than expected returns may be achieved. Investment in the Funds is not a bank deposit and investors risk losing some or all of their capital. Withdrawal rights are subject to liquidity and may be delayed or suspended. Read the PDS and TMD, available from our website.

An Interesting Transaction

Problem:

In December 2025, a broker introduced ASCF to a couple who were renovating a residential investment property in Malvern, Victoria. The customers required additional funds to complete a $250,000 renovation to the property. However, they were unable to raise the necessary funds through their 1^st mortgage lender to enable the renovations to be completed so as to maximise the sale value of the property. 

Solution:

ASCF commissioned one of our panel valuers to complete an “as is” valuation on the security property, which allowed us to offer a 6-month, 2nd mortgage loan of $282,000 at 14.95% p.a. with the sale of the property as the exit to repay the loan. The overall LVR was 55.59%. 

This enabled the customers to complete the renovation, and list the property for sale, with a contract secured in March 2026. Our loan was repaid in full the following month (April), and interest was only charged for the period the funds were drawn. 

The ASCF Advantage:

ASCF understands that customers require flexibility. As such, we can structure our loans to ensure borrowers can achieve their financial goals in circumstances where traditional lenders may not be able to assist. 

Property Update

Source: Cotality HVI, 01 May 2026