The ZAG Fund

The Zagga Alternative Growth Fund

The Zagga Alternative Growth Fund (ZAG Fund), an unlisted and unregistered managed investment scheme, provides an opportunity for wholesale/sophisticated clients to have an investment exposure to loans secured by mortgages over real property located across Australia, as well as other credit-related investments.

Through investing in the ZAG Fund, eligible investors can receive determinable income-generating and portfolio diversification opportunities without the need to personally scrutinise each and every individual loan opportunity, making it a secured investment alternative for many time poor investors, including SMSFs.

The ZAG Fund return, for the financial year ended 30 June 2018 (covering a six month period from January 2018) was 7.68% p.a*^.

Download a copy of the Information Memorandum to find out more.

*Past performance is not a reliable indicator of future performance and investments in the Fund are subject to investment risk, fees and costs. Returns are not guaranteed. Prospective investors should fully consider the Information Memorandum available from Zagga before applying to invest.

^Rates are based on the Zagga CAS score and returns are subject to risks. You can read more here.

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The ZAG Fund Information Memorandum

The Information Memorandum contains an offer of Units in the Fund (Offer) and provides information about the Offer. 

Key features of the ZAG Fund

Target

Target Investment Rate of Return

Not less than 6.50% per annum on the equity invested by Investors (after fees and costs but before tax, where applicable*).

*Rates are based on the Zagga CAS score and returns are subject to risks. Please see risks.

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Investment Strategy

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

  • reasonable investment returns via a professionally managed portfolio of mortgaged backed investments
  • semi-annual distributions (30 June and 31 December each year)
  • a low-cost investment structure.
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Minimum Investment

To participate in the returns from a wide range of loans secured by mortgages over residential, commercial, rural and industrial property across Australia; construction and development loans across Australia; and other income producing credit-related assets.

The Fund will achieve its Investment Strategy by investing in loans which the Zagga Investments Lending Trust (ZILT) will make to borrowers.

Key Investment Risks

Market risk

Market risk is the risk that negative market movements will affect the price of assets within a particular market. By their very nature, markets experience periods of volatility involving price fluctuations of varying magnitudes. In general, shares and listed property investments experience more volatility than fixed interest investments and mortgages, which in turn experience more volatility than cash investments. For mortgage investments this means the interest receivable from your investment may not move in line with general interest rate markets and the amount you receive as income may vary over time.

Investment risk

The Fund’s investments may be subject to economic variables (including economic growth and inflation) and changes to government policy. These factors are generally beyond the control of the Trustee.

Market conditions such as low or declining demand for real estate may result in the security property being sold for a price that is lower than anticipated and this may ultimately result in a lower return to Investors.

Default and credit risk

There is a risk that the Borrower may default under the terms of the Loan, including if the Loan is not repaid by the end of its term. This may be for a wide range of reasons, including a change in the:

  • individual financial or other circumstances of the Borrower; and
  • economic climate generally that adversely affects all Borrowers.

The Trustee manages this risk by applying its approved lending policies, collection and management systems (see section 5.7) and the Fund’s compliance programme. All Loans are subject to periodic review.

If a default occurs, the ZILT, either directly or via an appointed specialist third-party, will take all necessary action to remedy the default, including:

  • pursuing recovery of arrears of income and capital;
  • arranging the issue and service of all default notices and other notices of demand;
  • taking possession of the security property;
  • exercising the power of sale pursuant to the mortgage; and
  • otherwise dealing with the security property and collateral security, such as enforcing guarantees, to protect the Investors’ interests.

Income risk

The Trustee does not guarantee your investment in the Fund or the payment of any interest or principal in relation to a Loan. Your investment in the Fund is dependent upon the Borrower repaying the principal and interest on the Loan on their due date(s).

Liquidity

An investment in the Fund is illiquid and there are limited rights to withdraw your funds from the Fund after you have submitted, and we have received, your Application Form and have issued you Units.

Structural risks

Investing in an unlisted and unregistered managed investment scheme (such as the Fund) is not like investing directly on your own. The Fund must take into consideration all applications made by all Investors, which can result in different income or capital gains outcomes when compared to investing directly on your own. Therefore, income from the Fund may be different to that received from investing directly on your own. You should obtain professional advice before deciding to invest in the Fund.

Diversification risk

In the early stages the Fund will have limited diversity of loans. Diversification will increase as more loans are invested in.

Term risk

There is a risk that the individual Loans may not be repaid in a timely fashion which may cause a delay or potential loss of capital. The Trustee seeks to manage this risk through the initial Loan approval process as well as managing maturing Loans in a timely fashion.

Regulatory and taxation risk

The Fund’s operations may be negatively impacted by changes to government policies, regulations and taxation laws. Although the Trustee is unable to predict future policy changes, the Trustee seeks to manage this through its risk management and compliance programmes to monitor and manage regulatory change.

Further, Australian tax laws are constantly in a state of flux with the introduction of various taxation amendments which may affect you.

Tax liability is your responsibility; we are not responsible for the taxation consequences of an investment in the Fund. You should consult your own taxation adviser to ascertain the tax implications of your investment.

Unit Prices

*Rates are based on the Zagga CAS score and returns are subject to risks. Please see Key Investment Risks section above.

Zagga Coin

Unit Value

$1

Target

Unit Return

5.78% p.a* (annualised) as at 31 December 2018.

*Past performance is not a reliable indicator of future performance and investments in the Fund are subject to investment risk and fees and costs. Returns are not guaranteed. Prospective investors should fully consider the Information Memorandum before applying to invest.

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Next valuation

at 30 June 2019

Updates and Announcements

From time to time we’ll post important announcements in relation to the ZAG Fund, including any updates to the Information Memorandum on this page.


31 January 2019

The Zagga Alternative Growth Fund return, for the 12 months ended 31 December 2018 was 5.78% p.a*. Distribution Statements are currently being finalised and will shortly be issued to Unitholders.

*Past performance is not a reliable indicator of future performance and investments in the Fund are subject to investment risk and fees and costs. Returns are not guaranteed. Prospective investors should fully consider the Information Memorandum before applying to invest.

 
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The ZAG Fund
The ZAG Fund Application Form

Fill out your details below to download a copy of the ZAG Fund application form.

Have a question?

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Contact us

Our friendly staff are happy to assist 9am-5pm Monday to Friday. If we’re not available, try our chatbot or please send us an email.

Open Live Chat  |  1300 1 ZAGGA  |  info@zagga.com.au