Metrics Master Income Trust (ASX:MXT) (the “Trust”) listed in October 2017 raising $516m through the issuance of 258m units at a price of $2.00 per unit. Since listing the Trust has grown to a market cap of $1.5b with 736.1m units on issue. The Trust is managed by Metrics Credit Partners (“MCP” or the ‘Manager’), an Australian private debt-specialist asset manager founded in 2011 and with significant expertise in the Australian corporate loan market. MXT provides exposure to a portfolio of loans to Australian companies diversified by borrower, industry and credit quality. It does so through an investment in three wholesale funds managed by MCP, all of which provide exposure to the Australian corporate loan market but with differing risk-return investment profiles and target loan investments. From a credit quality perspective, the Manager targets the investment through to sub-investment grade segment (A through to B rated), reflecting the Manager’s view that this segment presents a particularly attractive opportunity set in terms of market pricing relative to default risk. Through the underlying investments, the Manager is targeting a return equal to the RBA Cash Rate + 3.25% per annum, net of fees and expenses. The Trust pays distributions on a monthly basis and to date has consistently exceeded the target return.
Independent Investment Research (IIR) has reaffirmed its Recommended Plus rating for the Metrics Master Income Trust (ASX: MXT). Over the four years since listing in October 2017, MXT has delivered on its investment mandate, providing exposure to an increasingly diversified portfolio of direct loans to Australian corporates and offering downside capital protection through a stable NAV. The Manager has consistently exceeded the target distribution of RBA Cash Rate + 3.25%p.a. and it has done so at a low cost to investors with a look through management fee of 0.60%p.a. The diversification benefits of fixed income to a portfolio were highlighted during 2020, with the Trust continuing to pay a monthly distribution as many listed companies cut of suspended dividends.
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