Trading Update
Australian financial markets remain buoyed by the Reserve Bank of Australia’s (RBA) third consecutive rate cut this year, reducing the official cash rate by 25 basis points to 3.60% at its August meeting. This decision was underpinned by continued disinflation, with headline CPI easing to 2.1% and the trimmed mean falling to 2.7% in the June quarter—both comfortably within the RBA’s 2–3% target band. Labour market conditions remain resilient, with unemployment holding at 4.2% despite signs of moderation in job creation. The RBA’s cautious optimism is reflected in its forward guidance, with most economists now forecasting a terminal rate of 3.35% by November.
The Australian economy expanded by 0.6% in the three months to June above expectations with GDP rising to 1.8% on an annual rate but still beneath the long term average of 2.7%. While consumer spending has rebounded more strongly than anticipated, driven in part by easing mortgage burdens, the RBA has signalled a data-dependent approach to further easing. The September meeting is expected to hold rates steady, with the November meeting presenting the next viable window for policy adjustment, contingent on Q3 GDP and wage growth data.
The property market continues to respond positively to the easing cycle. Auction clearance rates across combined capitals reached 74.3% last week, marking a new high for 2025 and reflecting renewed buyer confidence amid improving borrowing conditions. Despite persistent affordability constraints, tight supply and population growth remain supportive of price stability and moderate appreciation.
ASCF continues to observe robust demand for short-term, flexible lending solutions, particularly from borrowers seeking to capitalise on the favourable property market dynamics. Our disciplined credit selection and active portfolio management remain central to delivering consistent outcomes across our suite of funds.
In light of the RBA’s decision to lower the official rate, our targeted distribution rates are currently under review. Our High Yield Fund continues to offer a targeted distribution rate of 7.50% p.a. on a 12-month investment term with interest paid monthly and the targeted rate fixed for the duration of the term.
ASCF Current Targeted Distribution Rates
ASCF High Yield Fund
| 3 Months | 6 Months | 12 Months | 24 Months |
|---|---|---|---|
| 6.50% | 7.00% | 7.50% | 7.10% |
ASCF Select Income Fund
| 3 Months | 6 Months | 12 Months | 24 Months |
|---|---|---|---|
| 6.25% | 6.75% | 7.00% | 6.75% |
ASCF Premium Capital Fund
| 6 Months | 12 Months | 18 Months | 24 Months |
|---|---|---|---|
| 6.10% | 6.25% | 6.75% | 6.30% |
ASCF Private Fund
| 3 Months | 6 Months | 12 Months | 24 Months |
|---|---|---|---|
| 8.19% | 8.39% | 8.59% | 8.49% |
Managed Funds Under Management
as at 31st of August 2025
| August 2025 | |
|---|---|
| ASCF High Yield Fund | $173,846,109.93 |
| ASCF Select Income Fund | $53,298,271.73 |
| ASCF Premium Capital Fund | $28,281,708.82 |
| ASCF Private fund | $44,684,700.96 |
| Combined Funds under Management | $300,110,791.44 |
In August, loans and inquiry levels were steady, with $5,153,316.82 in loans settled.
The unit price across all three of our retail funds remains stable at $1.00 per unit.
All monthly distributions have been paid in full for the month of August.
Lending Activity Update
Quarterly Loan Settlements
as at 31st of August 2025
Current Loans by Fund Source
as at 31st of August 2025
| High Yield Fund | Select Income Fund | Premium Capital Fund | |
|---|---|---|---|
| 1st Mortgage Loans | 74.77% | 100% | 100% |
| 2nd Mortgage Loans | 17.36% | 0% | 0% |
| 1st & 2nd Mortgage Loans | 7.88% | 0% | 0% |
| Avg. Weighted LVR | 55.17% | 45.33% | 53.24% |
| Avg. Loan Size | $1,265,613.96 | $1,040,410.57 | $884,995.02 |
Current Loans Geography
as at 31st of August 2025
Why Invest with ASCF?
Why Pooled Mortgage Funds May Appeal When the Cash Rate is Dropping
When the RBA reduces the official cash rate, it often creates a ripple effect across the investment landscape. For income-focused investors, this can be challenging.
That’s where pooled mortgage funds may provide an alternative to consider.
Targeted Distribution Rates
Unlike other investments which adjust with the cash rate, ASCF pooled mortgage funds offer targeted distribution rates available across defined investment terms (3, 6, 12, or 24 months). These targeted rates remain the same for the chosen term which can give investors greater visibility when planning for income needs.
Diversification Across Borrowers
These funds pool investor capital across a portfolio of loans secured by real property. By spreading exposure across multiple borrowers, the reliance on any one loan is reduced, which can help manage portfolio risk.
Loans Secured by Property
Loans within ASCF’s pooled mortgage funds are secured by registered mortgages over Australian property. This provides an asset-backing component that differs from many unsecured alternatives
Relative Income Appeal
In a lower interest rate environment, the margin between cash-based investments and targeted distribution rates offered by mortgage funds may widen. For some investors, this can make them a relatively appealing option to explore.
Recent Rate Adjustments
While many variable rate investments have fallen by up to 0.75% since January, ASCF has adjusted certain distribution rates only once (by 0.25%), with current targeted rates otherwise remaining steady.
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:
A self-employed trucking company operator was facing ongoing issues with the trucks in his fleet. The maintenance problems affected his cash flow, causing his ATO debt to accrue to a sizeable amount. This debt prevented him from being approved for a refinance by both his current lender and the major banks.
The guarantor and his wife owned two residential properties west of Brisbane, which provided more than sufficient security for ASCF to consider the deal.
Solution:
ASCF provided a 2nd mortgage loan for $430,000 at 16.95% p.a. to clear the tax debt. This prevented any action from being taken by the ATO and allowed the operator to focus on getting his fleet back to full capacity.
The LVR across the two properties was 53.80%, including the existing first mortgages, confirmed by two independent valuations for each security.
What ASCF does differently
| While the major lenders look for a perfect financial history, ASCF worked with the borrower to secure funding that avoided ATO action, supported the business to get back on track, and positioned the borrower to refinance within the 12-month term. |
Market Update
Australia’s housing market extended its run in August, with values up 0.7%. This is strongest monthly gain since May 2024. Annual growth now sits at 4.1%.
Tight supply (listings 20% below average) and strong buyer demand pushed auction clearance rates to 70%. This is the highest since early 2024. Vendors are entering spring in a strong position, with low competition and broad-based price growth across the capitals.
Highlights:
- Strongest monthly gain in over a year
- Auction clearance rates at 70%
- Brisbane, Perth, Adelaide & Darwin leading growth
Property Values
as at 31st of August 2025
Median Dwelling Values
as at 31st of August 2025
Source: Cotality HVI, 1 September 2025
