Since our last update on March 20, there have been a number of State and Federal Government economic announcements both locally and abroad which have brought some stability to world equity markets in recent days.
This is encouraging and the Federal Government should be commended for the economic packages they have made available to both workers and businesses across the country.
We continue to monitor the situation closely and business operations continue as normal. At present, none of our staff or family members have been impacted by COVID-19.
Our cash position remains in line with our prior update which we deem adequate and anticipate maintaining a relatively high cash position in our funds over the next few months. Furthermore, we have not seen any increase in loan arrears which we are closely monitoring.
The unit prices across all our funds remains stable at $1.00 per unit and the average weighted loan to valuation in our funds remains low as per the table below.
We have seen an increase in loan applications from our origination network and broker feedback indicates this appears to stem from increased bank processing times. Despite this, since our previous update, we have further tightened our lending policy until such time as we have clearer visibility on the expected economic rebound. Certainly, the recent Federal Government economic announcements will assist with this.
We continue to see our loans being refinanced with over $5.5 million in loans being repaid this month of which $3.3 million have settled since yesterday and to date, we have not noticed any administrative delays by incoming lenders on settlements of loan refinances.
While COVID-19 has impacted the Australian economy, we are encouraged by the Federal Government’s economic response and will be maintaining a conservative funds management strategy over the short to medium term.
This article appeared in our March 2020 Investor Newsletter – download the full newsletter here.