Press Release – Trilogy Funds Review
Sydney, 17 November 2022 –
Foresight Analytics rates two Trilogy Funds Management Strategies
Foresight Analytics has completed a ratings assessment of two funds managed by Trilogy Funds Management; the Trilogy Monthly Income Trust (TMIT) and Trilogy Enhanced Income Fund (TEIF). Both the Monthly Income Trust and the Enhanced Income Fund have been assigned a VERY STRONG investment rating. A Foresight Complexity Indicator of COMPLEX has been assigned to both funds.
The investment rating of VERY STRONG is the second highest rating on the scale used by Foresight Analytics and reflects a very strong level of confidence that the Fund can deliver a risk-adjusted return in line with its positive absolute return objective.
The Foresight Complexity Indicator designation as COMPLEX for TMIT and TEIF indicates that the underlying assets require specialist investment skills to acquire and monitor. In addition, a large proportion of the Trust’s assets are illiquid, and investors should have a good understanding of the investment time horizon and the distribution characteristics of this type of fund.
Both Funds are managed by Trilogy Funds Management, a Brisbane-based investment management firm. It has its origins in 1998 when a Brisbane law firm, of which Philip Ryan was a partner, started an investment company managing mortgages and property assets. In 2004 Rodger Bacon and John Barry left their executive positions at Challenger Financial to join Philip in founding Trilogy Funds. Trilogy Funds Management is a 100% subsidiary of Trilogy Services Trust, which is majority-owned by Rodger Bacon. The other shareholders are senior executives of the company, such as Justin Smart, Phillip Ryan and John Barry.
Foresight Analytics’ analyst, Rodney Lay, says “The team at Trilogy is very experienced, having been in this sector since before the GFC (Global Financial Crisis)”. He added, “They have built a diversified, risk-averse portfolio of mortgages, which continues to drive strong, stable returns”.
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About Foresight Analytics’ Investment Due Diligence Rating (IDD Rating)
The objective of Foresight Analytics’ Investment Due Diligence Rating (IDD Rating) is to identify the best funds and opportunities for future investment. We assess the fund’s historical risk-adjusted performance – compared to its peers – to form a holistic view of the manager’s ability to deliver future returns. The IDD rating indicates the quality of the investment option within the context of a diversified portfolio and full investment cycle.
Foresight’s analysts use a 5-point scale to determine how the fund will perform against a range of risk factors.
- SUPERIOR indicates the highest level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is highly suitable for inclusion on APLs.
- VERY STRONG indicates a very strong conviction that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- STRONG indicates a strong likelihood that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- COMPETENT indicates the fund may deliver a risk-adjusted return in line with its relevant benchmark and that it may be suitable for APLs.
- WEAK indicates the fund is unlikely to deliver a risk-adjusted return in line with its investment objective and that it is not suitable for most APLs.
A ‘Hold’ designation is applied to a fund’s rating if a material change impacts the fund manager, and we need to review the rating.
A ‘Sell’ designation indicates the Foresight Investment Ratings Committee considers risk factors to be elevated enough that maintaining an investment in the fund as part of their diversified portfolio is questionable.
Foresight Complexity Indicator
A Foresight Complexity Indicator (FCI) highlights the complexity of an investment product based on a range of indicators. These typically include its terms and conditions, performance-based fees, liquidity structure, financial leverage, use of derivatives, rare and niche asset class/opportunity set, currency exposure and the level of transparency offered for investors. Foresight believes these factors can disproportionately affect risk-adjusted return outcomes for investors even if a manager is very skilled. Investors can use FCI as a guide to portfolio position sizing within a diversified portfolio context.
The full research report is available on the Foresight 360 Digital platform. The platform can be accessed via www.foresightanalytics.com.
Media Contact – Foresight Analytics
Rodney Lay, Analyst
Suite 208, 33 Lexington Drive, Bella Vista, 2153, NSW
Telephone: 02 8883 1369
About Foresight Analytics
Foresight Analytics, an independent Sydney-based investment firm, provides investment diligence, investment data analytics, and advisory solutions to leading investment management companies, superannuation funds and wealth groups across the Asia Pacific. Foresight’s innovative, evidence-based approach blends both human and forensic insights to provide a range of analytical, predictive and market intelligence solutions to investors. Foresight Analytics was founded in 2015 by Jay Kumar, a former executive of Morningstar, Optimix Investment Management, ANZ Wealth & Private Bank and the Reserve Bank of Fiji.
Foresight’s fiduciary solutions include Diligence Services (Investment, Operational, ESG & Risk Diligence), Data Analytics and Asset Consulting. Foresight’s fund strategy solutions include Data Analytics for asset managers, Fund Strategy Benchmarking Solutions and Strategic Research.