SocietyOne receives “Very strong” rating on Personal Loans Trust
Digital finance platform, SocietyOne, has received a rating of “Very Strong” for its Personal Loans Trust from independent ASIC-licensed ratings agency, Australia Ratings Analytics.
A rating of Very Strong is the second highest rating on the investment rating scale used by Australia Ratings, and indicates a very strong conviction that a fund can deliver a risk-adjusted return in line with its investment objective.
Since launching in April 2019, the Personal Loans Trust has achieved its target annual return of 5-6 per cent for its investors despite significant recent macroeconomic challenges, establishing that fintechs can compete through the economic cycle, says SocietyOne CEO Mark Jones.
“The consistently strong risk-adjusted returns SocietyOne has achieved for its investors, even throughout unprecedented times, is a testament to our business, staff, and policies. It is one of the many reasons our investors continue to invest in our personal loans unit trust,” said Mr. Jones.
“We are very proud of the credit quality we have been able to maintain, evidencing the quality of our credit procedures. The Personal Loans Trust also offers investors the ability to achieve a high cash yield in the current market, even though most of our investors are choosing to reinvest that yield.
“Now that loan origination levels are back to pre-COVID levels, and our default rates are lower than ever, we expect growth to continue momentum. This will be assisted by our approvals process, which takes 1 to 2 days, compared to banks and our competitors that can take 6 to 8 days, combined with some of the best interest rates in the market.”
The Personal Loans Trust is managed by SocietyOne Australia Pty Ltd and provides wholesale investors with access to a diversified portfolio of cash and personal loans.
It is specifically structured to provide, and has to date delivered, consistent income distributions with a stable unit price, which is a notable achievement given the need to manage risk in the underlying assets.
The Personal Loans Trust also received a ‘Yellow’ Product Complexity Indicator from Australia Ratings, meaning it is a complex financial product with underlying assets that require specialist investment skills to acquire and monitor.
Australia Ratings analyst, Maggie Callinan, said, “The rating of Very Strong reflects the experience of SocietyOne’s investment team, and their ability to effectively manage the portfolio of underlying loans. It also indicates the high level of confidence Australia Ratings has that the structure of the Personal Loans Trust will deliver the objective of stable returns with very low capital volatility.”