Income Investors: These Alternative Funds Are Delivering 9-13% Returns While Shares Struggle

04 August 2025

Summary

Income Investors, This Changes Everything

• If you’re tired of chasing dividend yields in a volatile share market, the latest quarterly review reveals some eye-opening alternatives that are delivering serious returns while you sleep.
  The standout? Alternative credit funds are smashing it with returns like 9.97% from iPartners  nearly triple the RBA cash rate – by lending to businesses that banks won’t touch. Meanwhile, Remara Private Credit delivered 13.33% with almost zero volatility. Yes, you read that right.
• Australian property funds aren’t just surviving the interest rate chaos – they’re thriving. Cromwell Phoenix returned over 20% by picking undervalued smaller property companies, while industrial warehouses are booming thanks to our online shopping obsession.
• But here’s where it gets interesting: the performance gap between the best and worst funds in each sector is massive. In global infrastructure, top performers delivered 23.72% while others lost money. Private credit ranged from 5.98% to 13.33%. This isn’t a market where you can just pick any fund and hope for the best.
  The data shows six distinct income sectors outside traditional shares, each with different risk profiles and return patterns. Some delivered exceptional Sharpe ratios above 45, others struggled with currency hedging and duration risk.
• With central banks cutting rates and retirees demanding income, these alternative sectors are seeing serious money flow in. But as the detailed fund-by-fund analysis reveals, knowing which managers have genuine skill versus those just riding the wave could make or break your retirement income strategy.
  The full breakdown includes specific fund names, risk metrics, and what’s driving performance in each sector.

The key takeaway is that manager selection really matters in these sectors – there’s a huge spread between the best and worst performers in each category.

ECONOMY AND MARKETS

Q2 2025 Commentary: Tariff Whiplash, Rate Cuts & Market Resilience

The second quarter delivered a roller-coaster of news—from Donald Trump’s sweeping “Liberation Day” tariffs to surprise central-bank rate cuts – yet global markets ended the period stronger. Investors grappled with trade tensions, geopolitical flare-ups and mixed growth data, but equities and bonds alike proved surprisingly durable.

Political Shocks: Tariff Drama & Ceasefire Hopes

On April 2, President Trump announced 10–50% reciprocal tariffs on 57 trading partners, triggering a sharp 11% pullback in the S&P 500 and a 12% slump in the NASDAQ over four trading days. Fears of a full-blown trade war pushed US 10-year Treasury yields from 3.86% to 4.50% in just three days. Yet by mid-quarter, the White House issued a 90-day pause, and US-China talks resumed, helping stocks recoup losses. In mid-June, Israel launched air strikes on Iranian nuclear sites, prompting US reprisals before a ceasefire on June 24th. Oil prices spiked briefly but ended Q2 unchanged as markets concluded that supply disruptions would be limited.

Economic Divergence: Growth on Two Speeds

Global growth showed a split personality. US GDP contracted –0.5% annualized in Q1, but June readings hinted at a Q2 rebound to roughly +2.4%. Inflation in May remained tame at 2.4% in the US and 2.1% in Australia, well below pandemic highs. Europe outperformed expectations with PMI surveys climbing above 51.7 in June, while China’s recovery stayed fragile – manufacturing hovered near contraction and retail sales merely stabilized. India again stood out, posting 4–5% growth in Q2 on resilient domestic demand and steady capex.

Central Banks: Easing Bias Despite Caution

Amid decelerating inflation, major central banks shifted to rate cuts. The ECB delivered two 25 bp cuts in April and June, bringing its deposit rate to 2.0%. The RBA followed suit in February and May, lowering the cash rate to 3.85% and signaling further easing if data soften. However, in early July the RBA shocked the markets by bucking expectations and holding off on another rate cut. It is widely expected to resume in August. The Fed, in a similar vein, held its target at 4.50% in April and June, citing uncertainty from tariffs and fiscal stimulus. Its June dot plot showed only one cut in 2025—more dovish than market-implied two cuts—reflecting a “meeting-by-meeting” approach amid lingering stickiness in services inflation.

Equities: Risk-On Rebound

Global equities rallied, with the MSCI World ACWI up 11.1% in Q2 and Emerging Markets +12.5%. In the US, the S&P 500 climbed 10.8% to fresh highs, led by a rebound in the “Magnificent 7” tech giants—Microsoft, Nvidia and Meta each jumped 30–50% after earlier setbacks. Australia’s S&P/ASX 200 rose 10% in Q2, propelled by strength in financials and tech while energy lagged on weak commodity prices. Growth stocks (+17.3%) outpaced value (+5.8%), and large caps slightly led small caps.

Bonds: Yield Declines & Spread Tightening

After April’s tariff shock, US Treasuries plunged, sending 10-year yields from 4.50% back to 4.25% by quarter-end. The Bloomberg U.S. Aggregate Bond Index gained 1.2% in Q2 and 4.0% year-to-date as yields eased and credit spreads normalized. In Australia, 3-year government bond yields fell 44 bps and 10-year yields dropped 22 bps, reflecting RBA cuts and global easing pressures. Investment-grade corporate spread widened briefly but finished near March levels, while high-yield spreads compressed nearly 100 bps from April peaks, bolstering corporate-bond returns of +3.5%.

Outlook: Cautious Optimism

Q2 proved that markets can thrive amid storms of political and economic uncertainty. With tariffs set to resume July 9th unless deals are sealed, volatility will likely persist. Yet continued central-bank easing, improving growth outside the US, and solid corporate earnings offer support. For US and Australian investors alike, balanced portfolios—blending global equities with high-yielding bonds—remain the best defense against whipsaw markets while capturing long-term upside.

Active Opportunity Set Review – June 2025 FUND PERFORMANCE

The June 2025 quarter review focuses on income producing sectors outside of the traditional listed equity markets – a space that is gaining interest and investment flows as a growing proportion of the population moves towards retirement transition.

The review underscores investors’ pivot to resilient, diversified income assets amid stable yields and evolving credit fundamentals. Manager selection and fee dispersion emerged as key differentiators, highlighting the value of active strategies in income generation.

Highlights include

• Alternative Credit Income averaged 6.24%; iPartners Credit and Realm Strategic Income led, while longer-duration credit ETFs lagged.
• Australian REITs returned 9.26%, with Cromwell Phoenix and SGH topping; industrial/logistics drove the rebound.
• Equity Income funds averaged 7.38% low-cost iShares Dividend Opportunities ETF and Franklin Martin Currie led, microcaps lagged.
• Global Listed Infrastructure funds averaged 14.19%; BT Infrastructure and Lazard’s ETF excelled, unlisted peers underperformed.
• Global Real Estate Income performance varied: CC CBRE Global Real Assets gained 11.42%, private-heavy mandates like Partners Group trailed.
• Private Credit remained strong at 8.31% average, with Remara Private Credit Income and Capital Prudential leading on floating-rate resilience.

1. Foresight Alternative Credit Income Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
Alternative Credit Income Top 5
iPartners Credit Investment Dis AUD	9.97	2.44	2.55	10.22	1.00
Realm Strategic Income Enduring	9.31	2.03	2.00	9.48	0.99
Manning Monthly Income	8.64	0.80	2.28	9.04	0.65
Yarra Higher Income	8.42	1.18	2.28	8.40	0.65
Pendal Dynamic Income	8.00	2.22	-0.25	6.75	0.55
Alternative Credit Income Bottom 5
Sandhurst Strategic Income A	5.10	0.54	-1.57	4.83	0.79
Bentham Global Income	4.75	5.05	0.26	5.54	0.72
iShares Core Global Corporate Bond ETF Hedged	4.65	5.70	-0.84	2.54	0.26
Vanguard International Credit Index Hedged	4.52	5.08	-0.94	2.36	0.32
Principal Global Credit Opportunities	2.80	6.22	-0.91	1.78	0.80
Sector Average	6.24	2.93	-0.24	6.02	0.64
Sector Median	6.35	2.39	0.10	6.31	0.64

• Alternative credit income funds aim to deliver regular yield by investing in private credit, structured debt, and income-generating credit assets-often uncorrelated to traditional equities.
• Q2 2025 saw a broad stabilisation in credit spreads, supported by central bank easing and resilient economic data across developed markets.
• The current sector average 1 year return compares favourably to the RBA cash rate of 3.85%
• The iPartners Credit Investment Fund targets 9-10% p.a. net of fees, investing in asset-backed securities, corporate loans and property debt for downside protection. It returned 9.97% over 1 year with a Sharpe ratio of 2.55, suggesting manager skill in sourcing secured private debt at attractive yields.
• Realm Strategic Income delivered 9.31% 1 year return versus RBA cash +4.75% p.a. target, leveraging Australasian mortgage and structured credit opportunities under APRA’s capital reforms.
• Bottom-ranked strategies showed weak returns (although mostly above the RBA cash rate) and high volatility – largely driven by higher portfolio duration.
• Global and hedged ETFs struggled, likely impacted by currency adjustments and exposure to higher duration holdings.
• Overall, dispersion in performance reflects the importance of manager skill and strategy design – factors that investors should prioritise as markets digest shifting interest rate outlooks.

 

2. Foresight Australian REITs Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
A REITs Top 5
Cromwell Phoenix Property Securities	20.02	15.09	0.62	12.97	0.82
SGH Property Income	19.48	15.72	0.52	9.77	0.95
VanEck Australian Property ETF	17.19	17.23	0.40	10.78	0.35
Zurich Investments Australian Property Securities	12.55	16.58	0.56	14.41	0.81
MLC Wholesale Property Securities	11.80	16.92	0.55	14.25	0.62
A REITs  Bottom 5
Ironbark Paladin Property Securities	7.21	17.68	0.44	11.99	0.75
SSgA SPDR® S&P®/ASX 200 Listed Property ETF	7.13	18.03	0.43	12.80	0.16
First Sentier First Sentier Property Securities	6.35	18.24	0.48	13.38	0.82
Alceon Australian Property	4.98	7.23	0.54	5.06	0.56
iShares Australian Listed Property Index	4.79	17.67	0.43	11.59	0.20
Sector Average	9.26	16.36	0.45	11.66	0.73
Sector Median	9.70	17.22	0.47	13.22	0.75

• The S&P/ASX 300 A-REIT Accumulation Index rose 13.4% in Q2 2025, outperforming the broader ASX 300’s 9.5% gain.
• Industrial and logistics sectors led the rebound, with Goodman Group up 21.0% and Qualitas surging 45.6% on robust e-commerce demand and supply-chain reshoring tailwinds.
• Office assets underperformed amid mixed rental data and stable valuations: Cromwell -6.1%, Dexus -3.5%, Centuria Office +2.2% and GDI +3.9%.
• Shopping centre owners delivered solid returns as consumer resilience persisted: Unibail-Rodamco-Westfield +12.4%, Vicinity +12.3%, Scentre +6.0%, Region Group +9.7% and Charter Hall Retail +10.7%.
• Residential developers outpaced the index on nationwide house-price growth: Cedar Woods +36.6%, Peet +19.7%, AV Jennings +9.9%.
• Two RBA rate cuts (Feb and May) underpinned valuation stability and dividend coverage, while easing credit conditions supported transactional volumes and rental growth in key sub-sectors.
• Over the past 12 months to late July, the A-REIT industry is up roughly 22%, reflecting strong sector rotation into high-quality real estate exposures.
• Looking ahead, further RBA easing should bolster yields, industrial assets remain the prime focus, retail will lean into experiential formats, and office leasing volumes are expected to gradually recover amid elevated incentives.

Fund comments

• Sector rebound: A-REITs delivered a solid 1-year average return of 9.26%, reflecting improved sentiment amid stabilising interest rates and resilient property fundamentals.
• Asset class dynamics: Listed property securities remain sensitive to macro shifts, particularly inflation and rate expectations. Volatility remains elevated (16.36% avg), but Sharpe ratios suggest improving risk-adjusted returns.
• Top performer: Cromwell Phoenix Property Securities Fund led with a 20.02% 1-year return. Its active, small-cap tilt and value-driven strategy helped it outperform peers.
• SGH Property Income Fund also impressed, balancing income and tactical allocation across A-REITs.
• VanEck Australian Property ETF returned 17.2% over one year, with a 10% per-REIT cap and just 0.35% management cost.
• Fee dispersion: Management fees ranged widely (0.20%-0.95%), with lower-cost ETFs underperforming active managers this quarter.
• Income yields remain enticing, averaging near 5.9% across major A-REIT ETFs and funds as rental fundamentals hold up.
• SPDR S&P/ASX 200 Listed Property ETF (SLF) has tracked its benchmark with a 0.16% fee and grounded liquidity .
• Alceon Australian Property Fund mixes 70% unlisted core assets with 30% listed REITs, achieving 10.3% p.a. since 2011.

 

3. Foresight Equity Income Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
Equity Income  Top 5
iShares S&P/ASX Dividend Opportunities ETF	14.60	12.41	0.47	11.52	0.23
Franklin Martin Currie Equity Income M	14.35	10.78	0.59	9.94	0.68
Plato Australian Shares Income A	13.19	11.71	0.49	12.07	0.90
Solaris Australian Equity Income	13.17	12.19	0.54	13.15	0.90
Vanguard Australian Shares High Yield	12.54	12.38	0.78	13.64	0.35
Equity Income Bottom 5
Vertium Equity Income	5.80	8.52	0.57	7.36	0.97
DNR Capital Australian Equities Income	4.23	11.50	0.56	6.40	0.90
Perennial Perennial Income Generator	2.93	11.90	0.47	8.74	0.65
Lincoln Australian Income Retail	0.33	10.44	-0.21	2.39	1.75
Microequities High Income Value Microcap	-1.72	13.39	0.53	5.91	1.00
Sector Average	7.38	11.17	0.51	8.40	0.86
Sector Median	9.56	11.37	0.54	9.54	0.88

• Equity Income strategies delivered solid gains in Q2 2025, with core high-dividend indices rising mid-single digits and most funds posting positive total returns.
• Financials were the top contributors, as banks and insurers benefited from resilient net interest margins and healthy underwriting results, underpinning attractive payout ratios.
• Dividend aristocrats continued to demonstrate payout resilience, with over 80% announcing hikes or maintenances for Q2 distributions, and share repurchases remained near record levels.
• Looking forward, central bank pivots, the trajectory of inflation and any renewed trade policy tensions will be key drivers. Yield spreads versus sovereign and high-grade credit still favor dividend-paying equities for income-seeking portfolios.
• Equity income funds delivered mixed results in Q2, with top performers significantly outpacing the sector average 1-year return of 7.38%.
• The asset class remains attractive for income-seeking investors, especially amid persistent rate volatility and a rotation into quality dividend-paying stocks.
• iShares S&P/ASX Dividend Opportunities ETF led the pack (14.6% 1yr), benefiting from its low fee (0.23%) and diversified exposure to high-yielding Australian equities.
• Franklin Martin Currie Equity Income M posted strong risk-adjusted returns (Sharpe 0.59), supported by its focus on high-franked dividend payers and active ESG integration.
• Plato Australian Shares Income A maintained solid performance (12.07% 3yr), driven by active dividend rotation and franking credit optimization for zero-tax investors.
• Solaris Australian Equity Income showed consistency across timeframes, with a 13.15% 3yr CAGR and a disciplined approach to dividend capture.
• Bottom quartile funds struggled, with Microequities High Income Value Microcap down -1.72%, highlighting the risks of concentrated microcap exposure in volatile markets.
• Fee dispersion remains wide (0.23% to 1.75%), with lower-cost funds generally outperforming on a risk-adjusted basis and underscoring the active versus passive cost-return trade-offs

 

4.Foresight Global Infrastructure Income Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
Global Infra Income Top 5
BT Infrastructure Wholesale Plus Value Unhedged	23.72	11.36	0.68	11.84	0.80
Lazard Global Listed Infrastructure Active ETF	20.75	12.06	0.57	10.49	0.98
Magellan Wholesale Plus Infrastructure	20.60	9.73	2.12	5.89	0.95
4D Global Infrastructure A	19.01	11.42	0.54	12.78	0.95
ATLAS Infrastructure Global D Unhedged AUD	18.72	14.50	1.71	10.29	0.63
Global Infra Income Bottom 5
Mercer Global Unlisted Infrastructure	10.04	3.35	2.16	8.71	1.50
First Sentier Global Listed Infra Fund (Hdg)	7.52	12.49	0.10	3.61	0.95
Invest Unlisted - Core Infrastructure A	6.73	3.38	1.94	7.16	0.73
AMP Capital Advantage Core Infrastructure	-4.20	7.41	-0.36	-1.61	0.99
Dexus Core Infrastructure H	-4.43	7.41	-0.41	-1.92	1.24
Sector Average	14.19	11.64	0.38	7.04	0.85
Sector Median	15.06	12.03	0.33	6.51	0.97

• Listed infrastructure proved its defensive mettle in Q2 2025, bucking early-quarter volatility to outperform broader equity markets and deliver positive total returns.
• Global infrastructure income funds blend listed utilities, toll roads, airports and unlisted assets to deliver inflation-linked yield and capital growth with moderate volatility in Q2 2025.
• Investors sought real-asset diversification amid sticky rates, pushing demand for defensive, yield-oriented strategies.
• European utilities led the rally after the European Central Bank signaled rate cuts and Germany unveiled fiscal stimulus focused on grid and renewables spending, lifting regional infrastructure names.
• Regulated assets continued to benefit from direct inflation-pass-through mechanisms, underpinning cash flow stability and supporting attractive dividend yields in a higher-rate environment.
• Digital infrastructure-especially data centres tied to AI and cloud growth-saw robust greenfield deal activity, reflecting sustained demand despite tariff headwinds.
• Infrastructure income funds delivered mixed results in Q2 2025, reflecting divergent performance across listed and unlisted strategies.
• Top performers were dominated by global listed infrastructure funds, benefiting from inflation-linked revenues and resilient earnings amid macro uncertainty.
• BT Infrastructure Wholesale Plus Value Unhedged led the pack with a 1-year return of 23.72%, supported by quality asset exposure and competitive fees.
• Lazard’s Active ETF (GIFL) returned 20.75%, driven by its “preferred infrastructure” approach and strong portfolio construction.
• Magellan’s Wholesale Plus Infrastructure posted a standout Sharpe ratio of 2.12, indicating strong risk-adjusted returns despite modest 3-year growth.
• 4D Global Infrastructure A delivered consistent long-term performance (12.78% 3yr CAGR), aided by active global diversification.
• Bottom quartile funds, including AMP Capital and Dexus, posted negative returns, likely impacted by valuation adjustments and higher fees.
• Unlisted strategies like Mercer and Invest Unlisted showed lower volatility but lagged in short-term returns. Mercer’s unlisted-heavy offering lagged at 10.04% as private debt and core mandates repriced more slowly than listed peers.
• Overall, listed infrastructure outperformed unlisted peers, highlighting market preference for liquidity and inflation hedging.
• Q2 dispersion of 1-year returns was extremely wide, from -4.43% to 23.72%, and highlights the critical importance of manager selection, listed vs unlisted mix and currency stance in a high-rate world.

 

5. Foresight Global Real Estate Income Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
Global RE Income Top 5
CC CBRE Global Real Assets	11.42	7.99	0.45	4.91	1.20
Dexus Global REIT Income AUD	10.65	12.27	0.43	5.07	0.98
Dimensional Global Real Estate Trust Inc AUD	8.68	13.62	0.30	5.43	0.30
Macquarie True Index Global Real Estate Securities	7.96	13.19	0.24	4.52	0.00
Vanguard International Property Securities Index	7.78	14.03	0.23	4.31	0.40
Global RE Income Bottom 5
CFS FC First Sentier Global Property Securities	-0.96	15.54	-0.07	-1.25	1.05
MLC Wholesale Global Property A	-1.10	16.13	-0.03	-0.24	0.87
Invesco Global Real Estate Fund A	-1.20	6.50	-0.61	-4.27	1.30
Spire Multifamily Growth and Income Hedged AUD	-2.10	0.00	-0.29	-10.60	0.85
Partners Group Global Real Estate	-5.74	0.00	-0.85	-8.28	1.75
Sector Average	3.12	14.85	0.09	0.65	0.73
Sector Median	3.01	15.54	0.03	0.87	0.81

• Global real estate income funds blend listed REITs, unlisted property and infrastructure for inflation-linked yield.
• Real estate income funds delivered mixed results in Q2 2025, reflecting divergent regional fundamentals and interest rate sensitivity across listed property markets.
• The asset class remains attractive for income-seeking investors, but volatility and dispersion in returns highlight the importance of manager selection.
• Top performers like CC CBRE Global Real Assets (11.42% 1yr return) benefited from diversified exposure to listed and unlisted infrastructure and property assets, with lower volatility and strong Sharpe ratio (0.45).
• Dexus Global REIT Income AUD (10.65% 1yr) capitalised on global REIT recovery, with active management targeting income and lower-than-market volatility, also aided by a 6.62% distribution yield and active tilts toward office and logistics sectors.
• Dimensional Global Real Estate Trust showed consistent long-term performance (5.43% 3yr CAGR) with low fees (0.30%) and broad REIT diversification.
• Bottom quartile funds like Partners Group Global Real Estate (-5.74% 1yr) and Spire Multifamily Growth & Income (-2.10%) struggled amid valuation markdowns and illiquidity in private real estate holdings.
• The sector’s average 1yr return of 3.12% masks wide dispersion, with a 4.67% spread between top and bottom quartiles, underscoring the need for careful portfolio construction.
• Passive vehicles trailed: Macquarie True Index Global Real Estate Securities (MAQ0832AU) delivered 7.96% and Vanguard International Property Securities (VAN0018AU) 7.78%.
• CFS First Sentier Global Property Securities (FSF0454AU) and MLC Wholesale Global Property (MLC0786AU) underperformed at -0.96% and -1.10%, hampered by UK retail markdowns and private valuation lags.
• Invesco Global Real Estate A (GTU5547AU), Spire Multifamily Growth & Income Hedged (ETL4846AU) and Partners Group Global Real Estate (ETL0480AU) returned -1.20%, -2.10% and -5.74% as office and private core assets repriced downwards in 2025.

 

6. Foresight Private Credit Universe

Fund Name	1yr Return	StdDev	Sharpe	3yr Return	Mgnt Fee
Private Credit Top 5
Remara Private Credit Income A Dis AUD	13.33	0.29	45.34	-	0.50
Capital Prudential Real Estate Income Opportunity	10.61	0.10	110.52	-	0.70
Balmain Opportunity Trust A	9.64	2.03	2.21	8.77	1.60
CVS Lane Property Finance A Dis AUD	9.64	2.27	2.26	9.46	0.50
Avari Private Loan Income	9.32	0.14	66.10	10.65	0.50
Private Credit Bottom 5
Challenger IM Credit Income Fund Class	7.18	1.05	2.35	7.92	0.35
PIMCO Private Diversified Lending	6.99	2.87	2.43	-	0.20
Metrics Master Income Trust	6.80	0.41	6.83	8.09	0.21
MCP Wholesale Investments Trust	6.33	1.30	0.21	5.47	0.23
Hamilton Lane Senior Credit Opportunities Hedged	5.98	-	-	-	1.25
Sector Average	8.31	1.34	4.41	8.99	0.73
Sector Median	8.30	1.30	2.26	8.77	0.75

• Private credit sustained its strong income profile in Q2 2025, with the sector averaging an 8.31% one-year return against just 1.34% volatility, translating into a compelling Sharpe ratio of 4.41.
• Private credit remains resilient, offering attractive risk-adjusted returns amid persistent volatility in traditional fixed income markets.
• Private credit fund returns ranged from 5.98% to 13.33% in Q2 2025, reflecting floating-rate income resilience.
• Top-quartile managers continued to outperform, delivering north of 9% returns by focusing on senior-secured, real-asset-backed loans and rigorous underwriting.
• Fee compression remains a tailwind, with the median management fee at 0.75%, helping preserve net yields even as competition for high-quality credits intensifies.
• Remara Private Credit Income Fund led the sector with a 13.33% 1-year return and a Sharpe ratio of 45.3, reflecting strong income generation with minimal volatility. This result is driven by its focus on diversified secured loans, a conservative bottom-up credit selection and capital preservation focus.
• Capital Prudential Real Estate Income Opportunity Fund posted an exceptional Sharpe ratio of 110.5, driven by disciplined senior real estate lending and monthly distributions targeting RBA + 6.75%.
• CVS Lane and Balmain Opportunity Trust delivered solid 3-year CAGR above 8.7%, supported by diversified mortgage-backed portfolios. Balmain Opportunity Trust A delivered 9.64% through low-LVR first and mezzanine mortgages.
• CVS Lane Property Finance Fund posted 9.64%, drawing on land and construction financing with approximately 10.85% IRR target.
• Avari Private Loan Income Fund maintained capital stability with a 10.65% 3-year CAGR and ultra-low volatility, reflecting its conservative LVR and first mortgage focus.
• While bottom quartile funds showed weaker returns and higher volatility, they all managed to outperform the RBA Cash Rate by a non-trivial margin.
• Fee dispersion remains wide (0.20%-1.60%), with top performers not necessarily charging more, highlighting the importance of manager skill over cost.
• Challenger IM Credit Income Fund Class gained 7.18%, harnessing multi-sector, floating-rate private credit.
• PIMCO Private Diversified Lending returned 6.99% via a global private credit sleeve hedged into AUD.