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How to get higher returns in a low-yield world

Superannuation funds get a lot of attention, but many of the industry’s biggest names are delivering poor returns for their clients.

To see the evidence, check out the latest edition of Stockspot's annual Fat Cat Funds Report, which covers the five years to June 2020.

Stockspot reported that AMP’s Capital Dynamic Markets investment option went backwards (yes, backwards!) during that five year period, experiencing negative growth of 2.2% per annum.

OnePath (which is owned by ANZ) delivered an average annual return of just 1.4% for its Select Leaders option.

Zurich’s Capital Stable option returned just 1.9% per annum over those five years.

By contrast, Credit Connect Group (CCG) delivered averaged annual returns of 10% during the five years to June 2020.

And that was not a short term fluke – CCG has averaged returns of 10% since its foundation in 2006.

 

Our secrets revealed …

So how has CCG been able to outperform so many professional funds?

It’s all to do with our business model and experience.

Given the lengthy period of time CCG has been in business, we are approached by numerous borrowers who need finance from CCG’s investor clients who are happy to provide loans of up to three years.

We provide those borrowers with a really valuable service. They come to us because they can’t get finance from mainstream banks/institutions, which means it's CCG who helps them buy their dream home, provide working capital or fund their next project. As a result, borrowers are willing to offer their property/project as security and CCG’s investor clients earn returns from 6 - 10% per annum.

We’re also very selective about which borrowers we approve. They need to demonstrate they’d be able to repay the loan. They need equity of at least 35 - 40%. They need to buy a property within 50km of a Metropolitan CBD. And they need to provide first mortgage security. As a result, our borrowers are highly unlikely to default – and, if they do, you are protected by the low LVR and the property’s resale value. Historically the level of defaulting borrowers that CCG have had has always been very low.

So as a CCG investor you will be offered a lending opportunity and you can decide if the rate of return offered is acceptable to you.

 

Why late 2020 is a golden opportunity for investors

As CCG’s track record shows, we're experienced in dealing in very different markets and economic environments, including 2008 GFC, 2009 Eurozone Crisis, 2018 Hayne Banking Royal Commission, current COVID pandemic. Our model worked well when Australia’s economy was in growth mode and is even more suited to these low growth times.

Property looks like a great place to park your money right now. Given the low yielding environment we globally find ourselves in, we are in unprecedented times.

First, the alternatives are unattractive – term deposit rates are at historically low levels. If you are currently earning above 1% you are doing extremely well, bond yields are at historically low levels and the stock market is highly volatile.

Second, mortgage rates are at record-low levels, which means it’s never been easier to repay a mortgage.

Third, there’s inflation which in Australia is currently running at 1.43% (Statista 2020) so if your investments are not earning more then the current rate of inflation you are actually losing funds.

Fourth, if you are one of the unfortunate investors that is currently invested with OnePath, AMP, Zurich's maybe its time to consider alternative investments, we are not saying these companies are bad it's just the poor returns they have paid to their investors, however CCG is a proven performer.

That’s why CCG is getting a lot of enquiries from people/investors who want to enter the mortgage lending market, but are reluctant as they have never invested into mortgages previously as its not a known form of investment like buying investment properties or buying shares. At CCG our 14 year lending record speaks for itself.

This is a golden opportunity for investors. Here’s why:

  • You get high yields
  • You are offered documentation to undertake all your own due diligence
  • You get to sign off on loans before committing your funds
  • You don’t have to do any work, because we manage loans on your behalf

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Disclaimer: The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation, and needs.

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