We don’t often start our investor updates with a victory lap… but this month, we’re making an exception.
There are a few things that have quietly clicked into place, and they’re all good news for you as an investor.
Supply and demand: finally in sync
After a bit of a wait, we’ve got loan supply to the point where we’re meeting investor demand.
That means very short wait times (if any) for Term Investments, and now we’re also on top of cash drag in the Monthly Income Fund.
It’s taken longer than we hoped to get here, but we’re now in a good, balanced spot. We expect that to hold through May.
Steady returns doing exactly what they should
March was a strong one.
Across both Term Investments and the Monthly Income Fund, returns were stable and consistent – which is exactly what we we’re aiming for.
Zooming out slightly, our Monthly Income Fund ranked third best performer for the month on InvestNow’s league tables (click twice on the ‘1-month’ column to sort from high to low).
Not bad for a strategy that isn’t about trying to swing for the fences, but instead delivering strong capital protection with regular reliable returns.
Global markets had a wobble (thanks to the Middle East conflict), with equities and bonds both taking a hit. This led to many other funds reporting negative returns for the month.
Our approach is different – we sit in that conservative to moderate risk space, focused on consistency over surprises.
And in months like the one we had in March, that tends to show.
Interest rates could be heading back up
Right now, the expectation is that interest rates could begin lifting mid to late this year, driven by inflation.
The beauty of our Term Investments and Monthly Income Fund is that they have floating rates, so if interest rates rise, you get to ride the wave upwards without lifting a finger.
Want a deeper property market view?
I recently wrote a deeper dive into where things might be heading which you can read on our blog.
A few Squirrel updates
We’ve made some important changes to set us up for the next phase of growth at Squirrel.
We’ve welcomed three new independent directors - Matt Blackwell, Caro Williams and Melissa Clark-Reynolds. At the same time, JB, David Cunningham and Wayne Scholtz have stepped down, while continuing in their executive roles.
This means we now have a fully independent Board, which is a big step forward.
We’ve also brought on Iain Cox as Head of Managed Funds.
Iain joins us from ANZ, most recently managing their $9b fixed income portfolio. He’ll be working alongside the wider team (i.e. myself and Doug Thompson) to help shape our investor offering and deliver greater value.
The usual quick updates
- Our loan portfolio is in good health, with fewer loans over term or in arrears compared to where we were pre-Christmas.
- A couple of loans may move to mortgagee sale—all well within what our Reserve Funds are designed to handle should a loss eventuate.
- Reserve Funds continue to build nicely.
- We've now paid $84m in gross interest to investors 🙌
Questions, comments, ideas?
If there’s something we’re doing well—or something we could do better—I’m always keen to hear it. Feel free to get in touch on dave@squirrel.co.nz.
