NZ Mortgage Income Trust (No. 2 Fund) Group Investment Fund

 

Fund Managers Otago Limited as a managed investment scheme manager does not offer investment advice. For investment advice we recommend that you make contact with a qualified registered investment advisor. Fund Managers Otago Limited is licensed under the Financial Markets Conduct Act 2013 [FSP30687] as the managed investment scheme manager of the NZ Mortgage Income Trust (No. 2 Fund) Group Investment Fund which is a Managed Investment Scheme (MIS) under the Financial Markets Conduct Act 2013.

View licence here. To view our schemes on the NZ Companies Office website – the Disclose Register.

Our Current Rate of Return

No 2 Fund Return for Quarter Ending 31 March 2018

If you would like to invest or find out more, we’d be happy to discuss how we can help you.

0800 800 212 Email Us Now

Client Testimonial

“My name is James Loan (Jimmy)I have been a client of the NZ Mortgage Income Trust for the past 15 years. Over this period I have been extremely satisfied with the returns on my investment. I can’t say enough about the staff of Fund Managers Otago, they are very courteous, patient and efficient when making enquiries, and when necessary there is easy access to the Managing Director, Mr Peter Hutchison.

I would have no hesitation in recommending this firm to anyone. By the way, when you call Fund Managers Otago a real person answers the telephone.”

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Print & Return Application Form

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Editable PDF to Complete Online

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Product Disclosure Statement

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2019 Annual Report

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Statement of Investment Policy Objectives

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Hardship Redemption Policy

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Amended and Restated Trust Deed

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Notice of Withdrawal

Annual Reports

The ever-changing regulatory environment under which Fund Managers Otago Limited operates, results in constant change in the way we run our business and communicate with you, our investors. This includes when we report to investors, how often we report and in what fashion. The rules surrounding the provision of the Schemes annual financial statements and annual report each year are set out below.

Annual Financial Statements and Annual Report

The Manager is required under section 96 of the Financial Markets Conduct Act 2013, to complete the financial statements for the scheme by 31 July each year and lodge this report with the Disclose Register and the Companies Office by no later than that date. We can confirm that we have consistently met this deadline.

A copy of the annual financial statements and the annual report can be requested from the Scheme Manager by emailing the request to enquiries@mortgagetrust.co.nz. Each unitholder has a right to receive a copy of the annual report if notice is given within 15 working days of receipt of the applicable report or newsletter by making a request to the Manager. The requested copy can be supplied electronically to you, by you downloading a copy from the Disclose Register , or a copy mailed out by the Manager free of charge.

Key Investment Points

This is an opportunity to invest in units in a group investment fund called the NZ Mortgage Income Trust (No. 2 Fund) Group Investment Fund (“Fund”) which is a Managed Investment Scheme (MIS) under the Financial Markets Conduct Act 2013 (MIS).

Fund Managers Otago Limited is the Manager of the Fund which invests in registered first mortgages and term deposits with registered banks solely within New Zealand. The Fund distributes its income to investors quarterly on the first day of April, July, October and January of each year.

The Fund was formed by Fund Managers Otago Limited in October 2007 to meet the needs of those investors who may be disadvantaged by the Portfolio Investment Entity (P.I.E.) regime.

The Fund aims to provide returns to investors benchmarked against the weighted average six month term deposit rate as published by the Reserve Bank of New Zealand. This rate is the advertised interest rate paid for a six month term deposit of $10,000. It is weighted by each of the surveyed registered banks share of household deposits from the aggregate bank statistical returns supplied to the Reserve Bank of New Zealand.

The Manager, Fund Managers Otago Limited, is a company that is focused on maximising returns for investors. Although managed from Dunedin, the Fund operates nationwide and lends nationwide to ensure a geographic spread of quality registered first mortgages.

Investors in the Fund benefit from the Fund being managed by an experienced Fund Manager, Fund Managers Otago Limited. The funds that are invested in registered first mortgages were invested in accordance with strict investment guidelines under the supervision of the trustee, Trustees Executors Limited.

The Fund comes under the Resident Withholding Tax regime and we recommend to that potential investors seek taxation advice from a professional financial advisor or tax specialist before investing in the Fund.

Further Fund Information

    • The minimum investment in the Fund is $500.
    • Returns can either be paid into an investor’s bank account or re-invested in further units in the Fund.
    • There is no fixed term for investments, although the Fund is geared towards medium to long term investors (2+ years).
    • The Manager has the right to charge withdrawal fees of up to 2% of the amount withdrawn during the first year of investment and 1% of the amount withdrawn during the second year of investment.  The Manager has historically not charged these fees and has decided not to charge any withdrawal fees for the foreseeable future.
    • Withdrawals will usually be paid within 90 business days after the Manager receives a withdrawal notice.
    • Investments are subject to fees as set our in the Product Disclosure Statement.
    • Investors can make regular contributions to their investment.
    • This investment is available to NZ residents only.
    • View more key investment points here.
    • For further information please contact your adviser or download our current Product Disclosure Statement.
    • The above return is based on the unit price as at the date each income distribution is made. Any investor who joined the Fund or withdrew from the Fund during the quarter would not necessarily earn the same return. The return to investors is calculated quarterly, after all fees and expenses have been deducted, and is expressed as a per annum equivalent before tax. Details on the return calculation are set out in the Product Disclosure Statement relating to the Fund that is available on request. Past returns do not guarantee future performance. Average quarterly returns are the mean average return and have not been compounded.

Litigation Risk

There is a risk that clients of the Fund and/or other third parties bring claims against the Fund. Depending upon the nature and extent of any claims brought against the Fund, the income returns of the Fund and/or the capital value of the Fund may be affected.

During 2016, the Fund received notice of District Court proceedings issued by the Crown seeking a forfeiture order for properties over which the Fund held first mortgages. That action was successful based on the finding that a criminal offence was committed by one of the Fund’s borrowers. The District Court decision was unsuccessfully appealed to the High Court.  Leave to appeal the High Court decision has been granted. The outcome of this appeal is at this time not known. The fluctuations in the graph on Page 1 of the update are as a result of the amount transferred to the Crown after the District Court decision which reduced the net assets of the Fund and therefore the unit price valuation. Legal fees incurred since the transfer to the Crown have been met from the income earned by the Fund prior to any distribution to investors each quarter therefore they did not impact the unit price valuation during that period. The civil action taken by the Fund to recover part of the loss was ultimately successful and resulted in the positive 2020 result reflected in the upward movement in the unit price valuation.

In the meantime, the Fund will continue with the policy pay out redemptions at 90 cents in the dollar rather than the unit valuation for all units in the Fund issued prior to 15 September 2016, to take into account the impact of the Crown forfeiture Order. This is to ensure that all investors who had invested in the Fund prior to 15 September 2016 (being the date on which investors in the Fund were notified of the redemption retention associated with the forfeiture) are treated fairly. Once the matter is finalised, if the effect on the value of the units in the Fund is 10 cents per unit or less, then the difference between the redemption funds retained and the loss suffered by the Fund will be paid out to those redeeming investors.

All unitholders who have invested or invest in the Fund after 15 September 2016 will be unaffected by the 90 cents in the dollar restriction.