La Trobe Australian Credit Fund

[Pages:84]La Trobe Australian Credit Fund

An Australian Investment Fund

Product Disclosure Statement

10 August 2021

1800 818 818 |

The Fund

La Trobe Australian Credit Fund ARSN 088 178 321

Level 25, 333 Collins Street Melbourne, Victoria 3000 Australia

Responsible Entity

La Trobe Financial Asset Management Limited ABN 27 007 332 363 AFSL 222213 ACL 222213

Level 25, 333 Collins Street Melbourne, Victoria 3000 Australia

Investment Manager

La Trobe Financial Services Pty Limited ABN 30 006 479 527 ACL 392385

Level 25, 333 Collins Street Melbourne, Victoria 3000 Australia

Level 9, Chifley Tower 2 Chifley Square Sydney, New South Wales 2000 Australia

Level 6, 626 Jia Li Plaza No 138 Ping Xing Guan Road Shanghai, China 200070

21/F, Tower One Lippo Centre 89 Queensway Hong Kong

Custodian

Perpetual Corporate Trust Limited ABN 99 000 341 533 AFSL 392673

Level 18, 123 Pitt Street Sydney, New South Wales 2000 Australia

Auditor

Statutory auditor of the Fund Statutory auditor of the Responsible Entity Statutory auditor of the Compliance Plan

KPMG Tower Two, Collins Square 727 Collins Street Melbourne, Victoria 3008 Australia

In your interest

Before making your investment decision, please consider this Product Disclosure Statement (PDS) and discuss it with your financial adviser.

La Trobe Financial Asset Management Limited (La Trobe Financial or we) and its Authorised Representatives do not provide financial advice and this PDS provides factual information only.

Investment tip

For peace of mind, you must determine which investment account is best for you. You must consider your attitude to risk and return so that you do not worry if the value of your investment changes. You must take responsibility for your own investment decisions and to this end you should consider obtaining independent advice before making any investment or financial decisions.

Product Disclosure Statement

This PDS is dated 10 August 2021 and has been issued by La Trobe Financial. This PDS has not been lodged with the Australian Securities & Investments Commission (ASIC) and is not required by the Corporations Act to be lodged with ASIC.

Your investments in the Fund are governed by the PDS that is in force from time to time.

ASIC takes no responsibility for the contents of this PDS.

What am I investing in?

The La Trobe Australian Credit Fund (Fund) is a managed investment fund registered by the national regulator, ASIC. Investments in the Fund are issued by La Trobe Financial. They are governed by the terms and conditions contained in this PDS, any subsequent Supplementary PDS that you execute and the Fund's Constitution (Terms). It is important that you read these Terms in full as they set out your rights and obligations in relation to your investment.

The Fund offers investments in seven Investment Accounts with different investment terms, yield and characteristics. This gives you the ability to choose the investment that best suits you.

Blackstone Group

La Trobe Financial's major shareholder is the Blackstone Group (Blackstone). Blackstone is one of the world's leading investment firms. Founded in 1985, Blackstone is a firm of nearly 2,300 employees in 25 offices worldwide with US$649 billion in assets under management.

Disclaimer

The primary regulator of the Fund is the Australian Securities and Investments Commission (ASIC). ASIC is undertaking an industry-wide review of managed investment schemes to ensure all are marketed as "true to label". La Trobe Financial strongly supports the efforts of ASIC to ensure that our financial sector remains efficient, honest and fair. On 18 December 2020, ASIC filed a legal claim against La Trobe Financial Asset Management Limited in its capacity of Responsible Entity (RE) for the Fund, regarding advertisements of the Fund between 2017 and 2020, with a particular focus on the Classic Notice and 90 Day Notice Accounts. ASIC's action relates to historical advertising and not the current activities or promotion of the Fund. ASIC are not seeking any stop orders or any injunctive relief. As at the date of this PDS, the action remains on foot. It is not expected that the action will have any material impact on the assets or the liquidity of the Fund or its accounts.

The offer contained in this PDS is an invitation only. The investments offered by La Trobe Financial:

?have not taken into account your investment objectives, financial position or particular needs; and

?like all investments are subject to investment risks, including reduction in the capital value of the amount invested, a less than expected return on funds invested, or a delay in payment.

The investments are not a deposit or other liability of La Trobe Financial or any of its related bodies corporate, and these entities do not guarantee or stand in any way behind either the capital value or performance of the investments. La Trobe Financial is not a bank and is not subject to regulatory supervision by the Australian Prudential Regulation Authority (APRA), but is regulated by ASIC.

Questions

If you have any questions concerning the information contained in this PDS please contact La Trobe Financial on 1800 818 818 or email us at investor@.au.

Investors should read this PDS in its entirety before deciding to invest.

TABLE OF CONTENTS

1 Key Features of the Fund

4

2 Investment Snapshot

6

3 Fund Portfolio Metrics

10

4 ASIC Benchmarks and Disclosure Principles 18

5 Investment Accounts

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Classic Notice Account

23

90 Day Notice Account

25

6 Month Notice Account

27

12 Month Term Account

29

2 Year Account

31

4 Year Account

33

Select Investment Account

35

6 Investing Through Investment Platforms

36

7 Fees and Other Costs

37

8 Asset Selection Guidelines

44

9 Investment Risks

46

10 Frequently Asked Questions

53

11 Additional Fund information

59

12 Non-Resident Investors

67

13 Glossary68

14 Completing the Application Form

70

15 Application Form

73

16 Selling Restrictions

79

W E investor@.au T 1800 818 818 F (+61) 3 8610 2851 M GPO Box 2289 Melbourne, VIC, Australia, 3001

From the Chief Investment Officer

There are no times in which it is easy to be an investor. Even periods of peace and prosperity generally only appear so with the benefit of hindsight. Nevertheless, there are times when investment seems particularly challenging. And now is certainly one such time.

The last 18 months will long be remembered. Here in Australia, we started in the fiery furnace of a horrific bushfire season, as fires across eastern Australia burnt an estimated 186,000 square kilometres of land. Thirty-four people lost their lives, over 5,900 buildings were destroyed and some estimates put the number of live-stock and native fauna killed as high as one billion.

Remarkably, even this catastrophe paled against the global pandemic that followed. The COVID-19 coronavirus was first reported to the World Health Organisation on 31 December 2019. As we write in July 2021, total cases of 200 million and there have been over 4 million deaths. The word `unprecedented' has done some very heavy lifting over the last 18 months, but there has truly been no event like the coronavirus in living memory.

It is therefore no surprise that markets have been exceptionally volatile. In March 2020, Australia's S&P ASX 200 experienced the fastest meltdown in financial history. This collapse was mirrored in stock and credit markets across the world. Then, on the back of massive, swift and coordinated government stimulus and policy loosening, markets began to recover and are now regularly recording new record highs.

At La Trobe Financial, we view these events with the realism borne of seven decades of experience in markets and in our asset class. We accept that the economic cycle will bring both good times and bad times. We know that volatility and uncertainty are the norm, not the exception. Investment outcomes are driven not by the avoidance of the market cycle, but by how portfolios are positioned to weather the storm and thrive despite it.

Our conviction in our chosen asset class is no secret. We believe that highly diversified portfolios of granular, mortgage-secured assets have delivered consistent performance across the cycle. Indeed, it was in moments when volatility was at its peak that the power of our offerings were made most evident.

Today, our $6.1 billion Credit Fund is Australia's largest offering of its kind. It has built a deep reservoir of trust with its 55,000 investors and offers a range of mortgage secured credit investments that have delivered consistent returns in good times and bad. Its highly diversified portfolios of low LVR assets delivered an incredible $224.5m in distributions to investors in FY21.

Just as important to us, however, is our enduring dedication to the highest standards of service. Whether you prefer to invest via our industry leading app, La Trobe Direct, or directly through one of our friendly investor team, you are entitled to expect a smooth and hassle-free path to investment with La Trobe Financial. This year, we are also pleased to announce two new offerings for our investors ? our 6 Month Notice and 2 Year Accounts. Please read this Product Disclosure Statement (PDS) for more details.

Thank you for considering an investment with La Trobe Financial. Should you require any further information, please call our friendly investor team on 1800 818 818.

Best wishes,

Chris Andrews

Senior Vice President, Deputy Chief Executive Officer & Chief Investment Officer.

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La Trobe Financial Asset Management Limited

Investment accounts that have stood the test of time

La Trobe Financial offers a range of Investment Accounts for investors. Our expertise in managing such investments has been developed over 7 decades. The aim of our Investment Accounts is to protect your capital, whilst producing regular income.

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2

3

SEVEN INVESTMENT ACCOUNTS

CLASSIC NOTICE

0.85 %* p.a.

Access to funds generally available within 2 business days**

Segregated pool of assets

90 DAY NOTICE

2.25 %* p.a.

Access to funds generally available within 90 days**

Segregated pool of assets

6 MONTH NOTICE

2.50 %*^ p.a.

Access to funds generally available within 180 days**

Segregated pool of assets

4

12 MONTH TERM

4.35 %* p.a.

12 Month Term Investment

5

2 YEAR

4.50 %*^ p.a.

2 Year Term Investment

6

4 YEAR

5.50 %* p.a.

4 Year Term Investment

7

SELECT INVESTMENT

5.50 %

From

p.a.

Investing for term Peer-to-Peer

Segregated pool of assets

Segregated pool of assets

Segregated pool of assets

Investment in specified asset(s)

INVESTMENT PERFORMANCE

Classic Notice Account** 90 Day Notice Account** 6 Month Notice Account**

12 Month Term Account

2 Year Account 4 Year Account*** Select Investment Account***

1 July 2021 Rate*

0.85% p.a. 2.25% p.a. 2.50% p.a.^ 4.35% p.a. 4.50% p.a.^ 5.50% p.a. from 5.50% p.a.

66mmoonnththss 0.43%

Historical Performance (30 June 2021)

1 year

2 years

3 years

1.00%

1.54%

2.07%

5 years 2.54%

1.13%

2.38%

2.65%

n/a

n/a

n/a

n/a

n/a

n/a

n/a

2.19%

4.50%

4.78%

4.96%

5.11%

n/a

n/a

n/a

n/a

n/a

2.78%

5.71%

6.08%

6.46%

6.77%

3.74%

7.77%

7.95%

7.94%

7.93%

An investment in the Fund is not a bank deposit, and investors risk losing some or all of their principal investment. You should take this fact into account in deciding whether to invest in the Fund.

*The rates of return are current at 1 July 2021. The rates of return are reviewed and determined monthly and may increase or decrease each month. The rate of return applicable for any given month is paid at the start of the following month. The rates of return are not guaranteed and are determined by the future revenue of the Fund and may be lower than expected. Past performance is not a reliable indicator of future performance. Withdrawal rights are subject to liquidity and may be delayed or suspended.

**We will make every endeavour to release your funds within 2 business days for the Classic Notice Account, 90 days for the 90 Day Notice Account, and 180 days for the 6 Month Notice Account after receiving your withdrawal request. We however have 12 months under the Fund's Constitution to honour that request. In determining whether to honour your withdrawal request within 2 business days for the Classic Notice Account, 90 days for the 90 Day Notice Account, or 180 days for the 6 Month Notice Account we have to have regard to the Fund's cash position and the best interests of all investors. There is a risk that a withdrawal request will not be honoured within 2 business days, 90 days or 180 days. However, there has never been a case in the history of the Fund when we have not honoured a withdrawal request on time due to a lack of liquidity.

***Neither the Select Investment Account nor the 4 Year Account permit reinvestment. Special Mandates are excluded from the historical performance of the Select Investment Account.

^This rate represents the expected launch investment rate of the 6 Month Notice Account and the 2 Year Account. The investment rate will be reviewed and updated monthly on our website: .

The 4 Year Account is also known as the High Yield Credit Account and is named as such in the Fund Constitution.

La Trobe Financial Asset Management Limited

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1 KEY FEATURES OF THE FUND

Product Name Product Issuer

Investment Accounts

La Trobe Australian Credit Fund

La Trobe Financial Asset Management Limited

The Fund offers Investors the opportunity to invest in loans secured by mortgages over real property located across Australia and other credit-related investments through the choice of seven (7) different Investment Accounts:

Account

Strategy Inception Date

Type

Classic Notice Account

1994

90 Day Notice Account

2019

6 Month Notice Account 12 Month Term Account

2021 Pooled Portfolio Investments

2002

2 Year Account

2021

4 Year Account

2016

Select Investment Account

1990

Peer to Peer Investment

Objectives

Investment Strategy Capital

Protection Fund Features

Responsible Entity

Investment Manager

Custodian

The key objectives of the Fund are to provide Investors with:

?a choice of professionally managed credit-related Investment Accounts, designed to allow each Investor to choose the most appropriate account for their circumstances;

?regular investment returns, either fixed or variable; and ?a low-cost investment structure.

To invest in a wide range of diversified residential, commercial, rural, industrial, construction and development loans across Australia and other income producing credit-related assets.

There is no guarantee of the investment result, the return of capital, or the amounts payable to Investors, and there are risks associated with an investment in the Fund. These risks are explained in Section 9 in this PDS.

The Fund:

?is managed by La Trobe Financial Services Pty Limited (Investment Manager), a highly experienced manager that has been managing investment portfolios of mortgage assets for over sixty eight years;

?is one of Australia's largest credit funds, with $6,050.5 million in assets under management at 30 June 2021; ?charges no fees on either investment entry or investment maturity exit; ?maintains conservative loan to valuation ratios, with a portfolio average of 63.3% as at 30 June 2021 (excluding

second or subsequent mortgages in the Select Investment Account); and ?has been judged "Best Credit Fund ? Mortgages" in Australia for the past twelve years by Money magazine for the

12 Month Term Account.

La Trobe Financial is the Responsible Entity of the Fund, and was incorporated on 14 November 1989 to operate the La Trobe Financial Group's retail investment and funds management arm. La Trobe Financial holds Australian Financial Services Licence (AFSL) No. 222213 and Australian Credit Licence (ACL) No. 222213 and is licensed by ASIC to operate registered managed investment schemes that hold deposits and mortgages for retail and wholesale clients.

Details of the track record and experience of the senior management of La Trobe Financial can be found at .

The Investment Manager is La Trobe Financial Services Pty Limited. It was established in 1952 and since that time has acted as the Investment Manager in respect of over $28 billion Australia wide for both institutional and retail investors, just like you. It employs approximately 440 staff specialising in credit lending, management and control of retail and institutional credit investments across Australia.

The Investment Manager holds Australian Credit Licence No.392385 issued by ASIC and is licensed to lend money under Australian law.

La Trobe Financial may appoint other investment managers at its discretion.

La Trobe Financial has appointed Perpetual Corporate Trust Limited as the custodian for the mortgage assets of the Fund. La Trobe Financial continues to hold cash, notes and other liquid assets of the Fund.

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La Trobe Financial Asset Management Limited

1 KEY FEATURES OF THE FUND

Disclosure Documents

Regular Reporting

Access to up-to-date information

ASIC Benchmarks and Disclosure

Principles Risks

This PDS is the primary disclosure document for the Fund and an investor must read the PDS online & register online or complete the Application Form in this PDS to become an Investor in the Fund.

In addition, to invest in the Select Investment Account, an Investor has to sign the Application Form attached to a supplementary disclosure document called a Supplementary Product Disclosure Statement (SPDS).

Investors receive the following regular reports: ?a Receipt of Investment made; ?detailed Transaction Statements; ?Financial Year Annual Taxation Statement (if applicable); and ?the Fund's Annual Report (when requested).

We aim to provide Investors with up-to-date information about the Fund, so that Investors can monitor their investments in the Fund. In addition, information in this PDS that is not materially adverse information is subject to change from time to time and may be updated. You can obtain up-to-date information about the Fund by:

?phoning La Trobe Financial's toll free Investor Liaison number 1800 818 818; ?logging on to La Trobe Direct, our state-of-the-art investment platform, accessible through La Trobe Financial's

website at ; and ?checking with one of La Trobe Financial's Authorised Representatives or your financial adviser.

A paper copy of any updated information, or continuous disclosure notice given by the Fund, will be given to you without charge on request.

ASIC has developed 8 Benchmarks and Disclosure Principles designed to provide investors with key information about investing in mortgage funds ? Regulatory Guide 45: Mortgage Schemes: Improving disclosures for retail investors. The Disclosure Principles cover liquidity, fund borrowing, loan portfolio and diversification, related party transactions, valuations, lending principles, distributions and withdrawals.

Please refer to Section 4 in this PDS for details.

When considering your investment in the Fund, it is important that you consider such things as:

?the risks involved in investing in the Fund; ?the extent that an investment in the Fund fits your financial objectives and goals; ?your risk appetite; and ?the risks that other investment opportunities have.

You should also remember that an investment in the Fund is not a bank deposit or a term deposit with a bank.

Your rights to redeem your investment in the Fund are set out in this PDS and the Fund's Constitution. In respect of the Classic Notice Account, 90 Day Notice Account and 6 Month Notice Account, we will make every endeavour to release your funds within 2 business days for the Classic Notice, 90 days for the 90 Day Notice and 180 days for the 6 Month Notice accounts after receiving your withdrawal request. In determining whether to pay your withdrawal request within 2 business days, 90 days or 180 days we have to have regard to the Fund's cash position and the best interests of all investors. There is a risk that a withdrawal request will not be paid within 2 business days, 90 days or 180 days, although it should be noted that, to date, all redemption requests to La Trobe Financial have been paid in full at maturity.

The risks attaching to the Fund's investments include:

?you may not receive the return you expected and may lose some or all of your return on investment; and ?you may lose some or all of your capital.

In Section 9 of this PDS, headed "Investment Risks", we go into considerable detail about the risks attaching to investing in the Fund. Here is a list of the investment risks that we describe in Section 9 of this PDS:

? Market risk ? Investment specific risk ? Documentation risk ? Credit risk ? Investment manager risk

? Regulatory risk ? Economic risk ? Concentration risk ? Fund capital risks ? Fund liquidity risks

? Fund income risks ? Non-performing borrowers ?Specific 4 Year Account risks ?Other risks, including construction and

development lending and cyber risk

La Trobe Financial Asset Management Limited

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2 INVESTMENT SNAPSHOT

In the following pages, in Section 2 ? Investment Snapshot and Section 3 ? Fund Portfolio Metrics, we provide a range of information about the Fund's seven Investment Accounts. The performance, risk and liquidity of your investment will depend on which Investment Account you choose. We manage the asset allocation for each Investment Account with the aim of maximising returns to investors while minimising the risks. We also aim to maintain appropriate cash levels for each Investment Account. We aim to achieve the benchmark objectives over the long term, but actual exposures will vary on a day-to-day basis, depending on market conditions. To ensure consistent performance across a range of market conditions, the Fund's mortgage portfolios are diversified at a number of levels, including sector, interest rate type, geographical location and loan size. When you are considering the Investment Snapshot and Fund Portfolio Metrics, you should keep in mind the following points:

Risks

1.Past performance is not a reliable indicator of future performance. 2.Investors risk losing some or all of their principal investment. 3.An investment in the Fund is not a bank deposit and investments in the Fund are not guaranteed by any entity. You should take this fact

into account when deciding whether to invest in the Fund. 4.Withdrawal rights are subject to liquidity and may be delayed or suspended. See the important note on page 49-50 in this PDS in relation

to La Trobe Financial's ability to allow withdrawals while the Fund is liquid (as defined by the Law). 5.In respect of the Classic Notice Account, 90 Day Notice Account and 6 Month Notice Account, we have 12 months from receipt to action a

valid withdrawal request. We will make every endeavour to release your funds within 2 business days for the Classic Notice, 90 days for the 90 Day Notice and 180 days for the 6 Month Notice accounts after receiving your withdrawal request. In determining whether to honour your withdrawal request within 2 business days, 90 days or 180 days we have to have regard to the Fund's cash position and the best interests of all investors. There is a risk that a withdrawal request will not be honoured within 2 business days, 90 days or 180 days. At the time of this PDS, we have never had to delay a withdrawal request due to a lack of liquidity.

Select Investment Account

6.Select Investment Account returns are specific to individual mortgages and therefore subject to availability.

Investment Returns

7.We consider that it is useful to measure the performance of our six pooled accounts against objective, measurable benchmarks. The benchmark for the Classic Notice Account is the Official Cash Rate plus 0.50%, and we have chosen this benchmark as it appropriately

reflects the risk and return combination of this Account. We aim to exceed this benchmark across the economic cycle. The benchmark for the 90 Day Notice Account is the Official Cash Rate plus 1.00%. We consider the 90 Day Notice Account benchmark to

be appropriate having regard to the risk and return profile of this Account. We aim to exceed this benchmark across the economic cycle. The benchmark for the 6 Month Notice Account is the Official Cash Rate plus 1.50%. We consider the 6 Month Notice Account benchmark

to be appropriate having regard to the risk and return profile of this Account. We aim to exceed this benchmark across the economic cycle. The benchmark for the 12 Month Term Account is the Bloomberg AusBond Bank Bill Index plus 1.50%. The Bloomberg AusBond Bank Bill

index is the leading benchmark for the fixed income markets in Australia, and we aim to outperform this benchmark by 1.50% across the economic cycle. We consider the 12 Month Term Account benchmark to be appropriate, as the 12 Month Term Account is part of the fixed income market in Australia, and the research houses that rate this Account measure its performance against this benchmark. The benchmark for the 2 Year Account is the Bloomberg Ausbond Bank Bill Index plus 1.65%. The Bloomberg AusBond Bank Bill Index is the leading benchmark for the fixed income markets in Australia, and we aim to outperform this benchmark by 1.65% across the economic cycle. We consider the 2 Year Account benchmark to be appropriate, as the 2 Year Account is part of the fixed income market in Australia, similar in nature to the 12 Month Term Account and the research houses that rate this 12 Month Term Account measure its performance against this benchmark. The benchmark for the 4 Year Account is the Bloomberg AusBond Bank Bill Index plus 3.00% over any rolling 4 year period and to provide positive returns over any rolling 12 month period. 8. The Fund currently does not use derivatives for interest rate management on loans, or investments in notes, made by the Fund.

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La Trobe Financial Asset Management Limited

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