As dividend investors, we’re always on the lookout for stable, income-generating opportunities that offer solid risk-adjusted returns. This week, I reviewed the latest Metrics Income Opportunities Trust (ASX: MOT) portfolio report dated 24 April 2025. Here’s what stood out—and what you should watch closely.
🔍 1. Return Trends: Slowing Momentum, Still Attractive
MOT has delivered a 1-year net return of 7.90%, which while respectable, has trended lower from its 2023 highs. The spread over the RBA cash rate has also narrowed to 3.49%, reflecting declining interest rate tailwinds.
📉 Visual Insight: The chart below shows a steady decline in returns and spreads—worth monitoring if you’re relying on MOT for predictable monthly income.
📊 2. Shifting Asset Allocation: More Equity, Less Senior Debt
There’s been a notable pivot from senior debt (58% of AUM) towards equity-like investments (now 27%), the highest level since inception. This shift is part of MOT’s strategy to hit its 8–10% total return target, but it does increase risk and volatility.
📉 Visual Insight: The stacked bar chart highlights this shift over the past year.
🧱 3. Sector Concentration: Heavy Bet on Real Estate
Real estate exposure now sits at 78%, up from 62% just three quarters ago. While commercial real estate can offer high yield, this degree of concentration introduces macro risk—especially if credit or property markets cool off.
📊 Visual Insight: A quick glance at the pie chart shows how dominant this sector has become.
⚠️ 4. Credit Watchlist & Enforcement Risks
The portfolio still holds a healthy 97% in performing loans, but:
- 2% are on watchlist
- 1.2% are under enforcement
- Loan maturity remains short at ~1.0 years, requiring frequent refinancing
🧯 No loan losses have been reported, but the uptick in enforcement and watchlist loans is something to keep an eye on.
📉 Visual Insight: The bar chart below shows the evolution of loans under stress.
✅ Final Verdict: Income Yes, Caution Advised
MOT remains one of the better private credit options on the ASX for monthly income with an annual return near 8%, net of fees. However, the rise in equity exposure, real estate reliance, and tightening yield spreads warrant caution.
💡 Tips for MOT Holders:
- Rebalance quarterly: Don’t overweight MOT—pair it with other credit/lending funds like KKC, QRI, or listed hybrid ETFs.
- Monitor equity risk: If equity allocation rises above 30%, consider trimming.
- Track macro signals: RBA moves and property sector trends will impact forward returns.
Disclosure: I hold a position in MOT as part of my diversified income portfolio. As always, this isn’t financial advice—just my personal take based on the latest fund data.