Money Magazine

On the income trail

A combination of factors has driven greater investment in mortgage trusts, but the industry believes Australians remain under-invested in this sector.

Retirees, people with self-managed super funds and others seeking capital stability as well as consistent income have pushed the recent growth, while the credit squeeze by the major banks has provided opportunities for the non-bank sector to offer good returns at reasonable risk.

At the same time, according to Louis Christopher, managing director at SQM Research, the chase for yield has increased the risk appetite of investors.

“Mortgage trusts are attracting borrowers on a slightly higher risk spectrum, paying 5%-6% or

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