Sunday, June 23, 2024

Consistent returns in uncertain times


In 27 years of business in investments and property finance, First Mortgage Trust has never lost a cent of investors’ capital.

In volatile times consistent investment returns are hard to find. That can be difficult for New Zealanders who rely on returns from their investments to live the life they’ve planned. First Mortgage Trust have been helping New Zealanders protect their savings and grow their wealth since 1996.

Paul Bendall, FMT CEO

The annualised pre-tax return for the March quarter was 6.61%, and they are anticipating it to continue to increase throughout 2023 – which is good news for their investors.

“We focus on what we know is important to our investors – protecting their investment, consistent returns and steady income-focused funds that are accessible when they’re needed,” says Paul Bendall, FMT Chief Executive.

“Investors’ money is our number one focus,” says Paul. “We have a disciplined, conservative investment approach with a proven track record – in our 27 years we have never lost any investor capital. A fact we are proud of, although it is important to note that past performance is not a reliable indicator of future performance.”

FMT is a fund manager, investors’ money is held in the fund and the fund is supervised by Trustee Executors. “Our trust structure with independent oversight gives our investors confidence that their money is being managed well,” says Paul.

The careful approach extends into many other aspects of the business model. For example, the fund only lends on first mortgages. FMT’s loan arrears currently are 2% of the loan book. “Even the banks would be proud to have loan arrears like that,” says Paul.

Next, the loan-to-value-ratios (LVR) are capped at 75% on residential property and 67% on commercial property, meaning the borrower requires significant equity before FMT will lend to them. Currently the average LVR across all their loans is 48% which is considerably below their maximum set, providing a substantial buffer to market movements.

Another point of difference in FMT’s conservative investment strategy is that for every single loan each property is independently inspected to understand the deal. A valuer’s report isn’t enough. “We are selective in where and who we lend to, and we have a rigorous process,” says Paul.

“We’re New Zealand’s largest non-bank lender of first mortgages. Non-bank-lenders, such as FMT, often pick up deals turned down by banks because of rigid criteria, not risk. In fact, some of those loans can be very low risk. It’s a win/win for FMT.”

Thanks to this conservative approach, coupled with increased returns for the last five quarters, FMT investor numbers are growing steadily, and largely by word of mouth. FMT now has more than $1.6bn of funds under management and more than six thousand investors.

Disclaimer: First Mortgage Managers Limited is the issuer of the First Mortgage Trust Group Investment Fund and the First Mortgage PIE Trust, and is not a registered bank. Past performance is not a reliable indicator of future performance. Returns are not guaranteed. Product Disclosure Statements are available at

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