Metrics Master Income Trust’s Distribution Dip Raises Questions on Future Yield Stability
Metrics Master Income Trust (MXT) reported a solid FY2025 with $2.44 billion in assets under management following a $315 million capital raise, while delivering an annual net return of 8.17%, outperforming its benchmark.
- Assets under management increased to $2.44 billion after $315 million wholesale placement
- Annual net return of 8.17%, exceeding RBA Cash Rate plus 3.25% target
- Distributions declared monthly with reinvestment plan in place
- Portfolio predominantly senior loans with BBB- weighted average credit rating
- Strong corporate governance aligned with Perpetual Limited standards
Robust Growth and Capital Raise
Metrics Master Income Trust (ASX – MXT) has released its audited financial results for the year ended 30 June 2025, revealing a steady expansion in assets under management (AUM) to $2.44 billion. This growth was driven by a successful $315 million wholesale placement completed in May 2025, which was oversubscribed and issued in early June. The capital raise has enhanced the Fund’s portfolio diversification and liquidity, broadening its investor base.
Performance Above Benchmark
The Fund delivered an annual net return of 8.17% for FY25, outperforming its stated investment objective of the Reserve Bank of Australia (RBA) Cash Rate plus 3.25% by 0.61 percentage points. This performance reflects the Fund’s focus on diversified Australian corporate loans, managed actively to balance income generation and capital preservation. The Fund’s investment portfolio increased its exposure to 348 individual assets, up from 316 the previous year, with 119 new investments entered and 87 exited during the year.
Distribution Stability and Reinvestment
Distributions to unitholders remained consistent, with a total payout of approximately $169.6 million for FY25, translating to 15.77 cents per unit, slightly down from 18.02 cents per unit in FY24. The Fund continues to offer a Distribution Reinvestment Plan (DRP), allowing investors to reinvest monthly distributions at net asset value, supporting capital growth alongside income.
Portfolio Quality and Credit Profile
The Fund’s portfolio remains predominantly composed of senior-ranking loans, accounting for over 98% of assets, with a weighted average credit rating of BBB-. Nearly all loans are to Australian and New Zealand borrowers, with no exposure to emerging or high-risk economies. This conservative credit stance underpins the Fund’s risk management approach and supports its stable income profile.
Governance and Risk Management
Corporate governance practices for MXT are integrated within Perpetual Limited’s broader governance framework, emphasizing fiduciary duty, transparency, and compliance. The Responsible Entity, The Trust Company (RE Services) Limited, maintains rigorous oversight of investment management and service providers. Risk management is robust, with a dedicated Governance, Risk & Compliance Committee overseeing adherence to regulatory requirements and internal policies. The Fund’s auditor, KPMG, issued an unqualified opinion, affirming the integrity of the financial statements and independence of the audit process.
Bottom Line?
With a strong capital raise behind it and consistent outperformance, Metrics Master Income Trust is well positioned to navigate evolving market conditions, though investors will watch closely for distribution trends and credit risk developments.
Questions in the middle?
- How will the Fund deploy the recent $315 million capital raise amid changing interest rate environments?
- What impact might evolving credit conditions have on the Fund’s BBB- rated loan portfolio?
- Will distribution levels stabilize or face pressure given the slight decline in cents per unit this year?
