Yarra Capital Management (Yarra), one of Australia’s largest independent active fund managers, is pleased to announce that leading research house Lonsec has upgraded Yarra’s Enhanced Income Fund (Fund) to its highest rating, ‘Highly Recommended.’

Lonsec said the awarding of its top rating reflects a combination of the considerable investment expertise of the Fund’s Portfolio Manager and its underlying track record of conservative risk management and strong performance over time.

In assigning its highest rating, Lonsec commended the Fund’s conservatively managed approach to investing in hybrid and other high yield securities, which it noted has resulted in medium-term returns above the peer median (from a total, excess and income perspective).

Lonsec also cited the combined expertise of the investment team, led by Roy Keenan, Portfolio Manager and Co-Head of Fixed Income, and Darren Langer, Co-Head of Fixed Income, both with over 30 years of credit analysis and fixed income investment experience. Their leadership added “strong skills and experience in credit analysis and portfolio structure” to the Fund’s investment process, Lonsec said.

Launched in June 2003, the Yarra Enhanced Income Fund aims to earn higher returns than traditional cash management and fixed income investments (over the medium to long term) through exposure to a diversified portfolio of hybrid (debt/equity) and fixed income securities.

The Fund engages 10 investment professionals to manage between 80 and 120 issuers, weighted largely towards higher-quality credits and preferred relative value stocks. Since inception, the fund has delivered a return of 6.05% per annum (net of fees, including franking) to the end of October 2024, equivalent to an excess return of 2.77% per annum above the RBA Cash Rate over the same period.

Lonsec’s report noted that the Fund’s ‘Highly Recommended’ rating reflects the research house’s view that it has a ‘very strong conviction that the product can meet its investment objectives.’¹

Roy Keenan, Portfolio Manager of Yarra Capital Management’s Enhanced Income Fund, commented:

“We are honoured to receive an upgrade to Lonsec’s highest possible rating, reflective of the Fund’s strong, long-term investment performance. We thank clients and advisers for their support over the Fund’s 20-year journey, and look forward to continuing to deliver consistent returns into the future.”

Edward Eason, Managing Director of Yarra Capital Management, added:

“The further endorsement from Lonsec is reflective of Yarra’s relentless pursuit of risk-adjusted returns and an unwavering commitment to its philosophy and process. We congratulate Roy and the team, and are excited for the ongoing successes that lie ahead.”

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¹ Lonsec ratings definitions, Yarra Enhanced Income Fund, Lonsec Research, 21 November 2024.