Skip to content I’ve been diving into a segment of the ASX that’s gained traction with income investors lately: listed private credit and fixed income LICs and LITs. They’re not as transparent and simple as your usual fixed income ETF and shares, but for anyone looking to build a consistent income stream, they’re worth a deeper look.
Here is a breakdown of what these funds actually invest in, their fees, historical returns and what I personally plan to watch. Recently I have been thinking about building a income portfolio for my wife.
So What Is Available? A Quick Comparison
| Ticker | Name | Yield | 1M Return | 1Y | 3Y | 5Y |
|---|---|---|---|---|---|---|
| MRE | Metrics Real Estate Multi-Strategy Fund | 5.36% | -7.36% | N/A | N/A | N/A |
| KKC | KKR Credit Income Fund | 9.03% | -4.00% | 4.3% | 8.89% | 15.14% |
| PCI | Perpetual Credit Income Trust | 7.13% | -0.27% | 10.9% | 11.38% | 11.53% |
| MA1 | MA Credit Income Trust | 9.09% | 0.51% | N/A | N/A | N/A |
| PCX | Pengana Global Private Credit Trust | 7.05% | 1.08% | N/A | N/A | N/A |
| DN1 | Dominion Income Trust 1 | N/A | 1.08% | N/A | N/A | N/A |
| GCI | Gryphon Capital Income Trust | 8.38% | 0.60% | 8.36% | 7.79% | 11.34% |
| MOT | Metrics Income Opps Trust | 8.00% | -6.58% | -5.19% | 4.64% | 14.35% |
| MXT | Metrics Master Income Trust | 8.02% | -5.11% | 3.5% | 6.96% | 10.06% |
| Ticker | Name | Segment | Benchmark/Target | MER | Outperf Fee |
|---|---|---|---|---|---|
| MRE | Metrics Real Estate Multi-Strategy Fund | AU Property | Total return 10-12% | 1.29–1.54% | Yes |
| KKC | KKR Credit Income Fund | Fixed Income Global | Yield 4–6%, Total return 6–8% | 0.902% | Yes |
| PCI | Perpetual Credit Income Trust | Fixed Income Global | Cash rate + 3.25% | 0.88% | No |
| MA1 | MA Credit Income Trust | Fixed Income Global | Cash rate + 4.25% | 0.90% | No |
| PCX | Pengana Global Private Credit Trust | Fixed Income Global | Yield 7% | 1.20% | Yes |
| DN1 | Dominion Income Trust 1 | Fixed Income AU | 1M BBSW + 3.5% | 0.50% | No |
| GCI | Gryphon Capital Income Trust | Fixed Income AU | Cash rate + 3.5% | 0.90% | No |
| MOT | Metrics Income Opportunities Trust | Fixed Income AU | Yield 7%, total return 8–10% | 1.03% | Yes |
| MXT | Metrics Master Income Trust | Fixed Income AU | Cash rate + 3.25% | 0.86% | Yes |
What These Funds Actually Do
Here’s a simple breakdown of what these LITs/LICs hold behind the scenes:
Metrics Real Estate Multi-Strategy Fund (MRE): Split into passive lending and active equity-style exposure. The active portion includes preferred equity and participation in project development —higher risk, but with upside potential. Passive portion is linked to lending for income focus.
Metrics Income Opportunities Trust (MOT): A mixed bag of secured private debt, real estate debt and credit trusts. Also includes equity-like components such as warrants, options, preferred shares. Provides income with upside for higher total return.
Metrics Master Income Trust (MXT): Pure Aussie corporate loans. Much more straightforward, apparently this segment is what the Aussie banks participate in as well.
Gryphon Capital Income Trust (GCI): Invests in RMBS (prime and non confirming residential mortgage-backed securities) and ABS (auto loans, SME, consumer finance). Australian exposure.
Dominion Income Trust 1 (DN1): Holds loans, trust interests and notes issued by corporate, banks and non banks. Structured with a 6 year maturity and with plan to early call at year 5. Includes step-up margin and equity reserve feature.
Pengana Global Private Credit Trust (PCX): Could be described as a fund of funds investing in 20+ private credit managers globally across income, balanced and total return strategies. Exposure includes direct lending, structured finance and specialist finance mainly in the US and Europe.
MA Credit Income Trust (MA1): MA Financial does most of the deals—involves direct asset lending, corporate lending and asset backed lending with some US exposure.
Perpetual Credit Income Trust (PCI): Diversified credit book with bonds, RMBS, ABS and offshore banks exposure. Predominantly Aussie issuers.
Kkr Credit Income Fund (KKC): Involves two strategies—opportunistic credit which are loans, bonds and high yield, and European direct lending.
What I’m Watching
I’m particularly keeping an eye on:
GCI: Consistent returns, Aussie-focused RMBS/ABS and relatively simple strategy. I feel more comfortable with Australian market exposure.
MRE: Mix of debt + equity exposure is interesting but MER jumps to 1.54% after year one so something to watch out for in terms of impact on return.
MA1: Contains global exposure and a hands-on manager doing the deals. Could be a diversifier.
On a separate note, observing historical performance although not an indicator for the future, PCI/MXT/KKR have solid performance and decent fee in this space. And a heads up, VanEck is launching a new RMBS ETF soon which could be a game changer too.
Final Take
These LIC/LITs aren’t for everyone as they are more complex, opaque and to an extent carry liquidity and market pricing risk. But for those building a diversified income portfolio with yield north of 7%, they can definitely offer attractive exposure beyond term deposits, shares and bonds.
In terms of investment decision, it all depends on your comfort with the underlying strategies and geographies. Hope this post helps with a consolidated breakdown! Cheers!
Note: MER, Total Return and Outperformance Fee data are generally sourced from ASX website, I have went through to each manager’s site to further conduct due diligence and edited as I saw fit. Above data is valid as of March 2024, distribution yield is indicative as of 24th April 2024.
DISCLAIMER: Please note that this post is based on my personal analysis and opinion only. This is not financial advice. The content provided here does not constitute professional, personal financial, or financial recommendations. You should conduct your own research and seek independent legal, financial, or taxation advice to understand how the information may apply to your unique circumstances.
