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Annualised returns for the Quarter ending were:30 June 2018Return is before tax and after fees and expenses. Past returns do not guarantee future performance. *PIE Fund effective return is calculated based on a taxpayer paying tax on non PIE income at 33%
*PIE Fund
5.86%PA
Group Investment Fund and PIE Fund
5.45%PA
I N V EST M E N TS | P RO P E RT Y F I N A N C E
First Mortgage Trust - Toll Free 0800 321 113 [email protected] | www.fmt.co.nz
First Mortgage Managers Limited, the issuer, is not a registered bank under the Reserve Bank of New Zealand Act. Risk and returns between our investments and bank fixed term deposits are different. For a copy of our Product Disclosure Statement call 0800 321 113
or visit our website – www.fmt.co.nz
Hello and welcome to our new look
newsletter.
I am very pleased to report that our
investor return has increased. This has
been achieved through an increase in
good lending opportunities.
For the June quarter, 1st April to 30th
June 2018:
5.45% pa Group Investment Fund and
PIE Fund.
5.86% pa PIE Fund – effective rate for
33% tax payers.
When comparing our investment return
to the major Banks' 6 to 12 month fixed
term deposit rates, you are likely to find
we are achieving around a 2% higher
return for our investors. That equates to
around a 60% higher return.
While you cannot directly compare an
investment in a New Zealand Trading
Bank to one in First Mortgage Trust (due
to the different risk profiles of each
investment), considering all our
investments are either secured against
first registered mortgages or held in cash
deposits with New Zealand Trading
Banks, I think First Mortgage Trust
provides an investment option that is
hard to beat.
I am firmly of the belief that the Fund has
never been more resilient or in a better
position than where it is today,
particularly considering our track record
and 22 year history.
At the time of writing this report, I am
preparing for our annual investor
meetings. It is my 13th year at the helm
of First Mortgage Trust and presenting on
the Fund's position and performance.
We have had an incredible response to
our invitations to attend this year's
presentations, with record numbers
FROM THE CEO
conf i rmed for a l l venues. I am
anticipating attendance at our Tauranga
presentation will exceed 500.
I will report on this in my next newsletter.
As not everyone is in a position to attend,
I thought I would use this newsletter to
cover the key messages in my
presentation.
Two key messages – resilience and
performance:
l By resilience, I mean our core
conservative and cautious values.
l By performance, I mean our results -
what we have achieved based on
these values.
T h e r e s i l i e n c e o f t h e F u n d i s
demonstrated by the quality of the loans
we hold against your investment in the
Fund.
In the last financial year (1st April to 31st
March 2018), out of over 620 loans there
was only 1 loan where the Fund did not
receive all of the interest due. The loss of
interest, not investor capital, was
$56,000 against a total loan portfolio of
$525 million. This loss was covered by
the Reserve Fund.
Moreover this was the 4th consecutive
financial year end where we reported
zero non – performing loans. I think you
would agree this is a credible and
enviable result.
We continue to maintain
what is regarded in the
i n d u s t r y a s a
conservative lending
policy. This is commonly
referred to as lower loan
to value ratios. We take a
relatively conservative
approach in the way we
manage the business. It
is important to us that
borrowers have a good
deposit or equity in the
property we lend on.
Our investment policy is
to lend on properties
t h r o u g h o u t N e w
Zealand, but with a
focus on propert ies
within the Bay of Plenty,
Waikato and Auckland regions.
These regions have traditionally held or
increased property values and generally
support growth, have employment
opportunities and strong GDP. The
resilience or quality of our loan portfolio
is supported by a mix of residential,
commercial, rural and development
loans.
Now to performance: In the last
financial year (1st April 2017 to 31st
March 2018) we returned $30 million to
our investors.
I have included a graph to best
demonstrate our quarterly returns
compared to the average Bank 6 month
term deposits for the same period.
The return to investors in our Fund for
this period was 5.31% per annum, an
effective return of 5.71% per annum for
those investors in our PIE fund with a
personal income tax rate of 33%. The
average Bank 6 month deposit rate for
the same period was 3.28%.
The numbers speak for themselves.
I want to assure you; These results have
not been achieved through dealing in
higher risk loans – far from it. I reiterate
the fund had zero non-performing loans
at our financial year end. We intend to
maintain this position.
The fundamental difference, and what
underpins our higher return, is how and
what the Manager of the Fund charges
investors compared to banks.
Kind regards
Tony Kinzett – CEO
First Mortgage Managers charges a
management fee to manage the Fund.
All returns in excess of the fee are
generally paid to our investors. Banks
are margin takers. That is, they take the
difference between what they offer
investors and charge borrowers. This is
significant to our performance and why
F i r s t Mor tgage Trus t 's re turn i s
substantially higher.
Looking to the future. We look ahead
with confidence. Our view is the
property market in New Zealand is
stable and values have generally been
maintained.
Confidence in property and good
lending opportunities remain steady.
This should result in the continuation of
consistent returns to our investors.
At our investor meeting, attendees will
be offered the opportunity to ask
questions. I extend this opportunity to
those of you that have been unable to
attend. Please feel free to call me or one
of our management team to discuss any
questions you have.
Thank you for your continued support of
the Fund.
First Mortgage Trust - Toll Free 0800 321 113 [email protected] | www.fmt.co.nz
YOUTH SPONSOR
Sam ShergoldFirst Mortgage Managers Limited (the Manager of First Mortgage Trust) has sponsored the
following person. This is not a cost to FMT investors – it is funded by the Manager.
*NB Where donations are made by the Manager, these do not come out of investor funds.
Donations are paid for by the Manager although in the name of First Mortgage Trust.
The event was set for excitement as a
solid 3-6ft surf fluctuated throughout
the 3 days of competition.
I came away from one of my best
nationals after finishing with gold in the
Board Relay, Ski Relay, Taplin Relay and
Rescue Tube Rescue and a bronze in the
Double Ski. Although many other finals
were made in both individual and team
events, I couldn't manage to grasp more
medals . As a sur f c lub, Mount
Maunganui came away with the
winning title for the sixth consecutive
year, creating history.
Since March I have enjoyed some down
time surfing and relaxing with friends
before setting goals for the next targets. I
have taken the opportunity to improve
my cooking skills while also trying to
add more healthier options that fuels my
body better and is ultimately less
processed food. Although you win
some, you also lose some and learn, just
like sport.
This year the ISA World SUP and prone
paddleboarding Championships are
held in Brazil during November. If I were
to be selected for this team it would be
my fifth year in the NZ team, having
medalled every other year.
Thank you
Sam Shergold
The 2018 summer season of racing finished in the
middle of March when the Surf Life Saving
National championships were held at Midway
Beach, Gisborne.
Tauranga Intermediate Boys Cricket (TIBC)
Numerous lead up games are
required to be played and won, to
advance towards the ultimate goal of
going to Christchurch in November.
Tauranga Intermediate School has a
long and impressive record in cricket
as being very competitive. In
February and March this year the
school cricket team earned the right
to compete in a local tournament of
20/20 cricket comprising of five Bay
of Plenty teams, with the winning
team to progress to the next stage
towards playing in Christchurch.
The other Intermediate schools
represen ted were Otumoeta i
(Tauranga), Bethlehem (Tauranga),
Whakatane, and John Paul College
(Rotorua).
After TBIC had beaten the four other
teams, a final was then played against
Otumoetai with TIBC once again
being victorious and earning the right
to become the Bay of Plenty 2018
Intermediate Schools representative
team.
The next s tage was a fur ther
tournament of 20/20 cricket against
five intermediate school teams
representing (1) Kamo – Northland,
(2) Pukekohe – Counties Manukau,
(3) Berkley – Hamilton, (4) St Peters –
Waikato Valley and (5) Gisborne –
Poverty Bay.
It was very pleasing for everyone
involved with TIBC that they once
again won all five games and are now
the Intermediate schools Northern
Dis t r ic t s represen ta t ive team
t rave l l ing to Chr i s tchurch in
November.
The players, coaching team, families
and supporters are extremely
appreciative that First Mortgage
Managers have kindly agreed to
sponsor the team uniform and playing
gear.
Amongst Intermediate schools there is
an intense determination to represent
their province in a New Zealand wide
tournament held each year in
Lincoln, Christchurch, based at the
NZ Cricket Academy.
Northland 2% Auckland 59%
Bay of Plenty 15.5%Waikato, Coromandel& King Country 8.5%
Taranaki 0.5%
Hawkes Bay 1%
Wellington 4.5%
Marlborough 0.5%
Otago 0.3%
Canterbury 6%
Southland 0.5%
Manawatu & Wanganui 1.5%
Tasman 0.1%
Nelson 0.1%
Residential56%
Bank Deposits18%
Rural 11%
Commercial15%
INVESTMENTS BY TYPELOANS BY REGION
As the Manager of the Fund we have aimed to continue our conservative position. The Fund has been managed to maintain a spread and mix of quality property as securities for our loans. The map and
graph providing detail of Loans by Region and Investments by Type as at 6 June 2018 demonstrate the diversity of First Mortgage Trust.
First Mortgage Trust - Toll Free 0800 321 113 [email protected] | www.fmt.co.nz
New Staff
Kevin Menezes
- BDM Administration Assistant
Kevin joined the FMT team in March
as an administrative assistant, based
in Auckland. He is originally from
India and migrated to New Zealand
in 1999. Kevin has worked in
various roles across Rural Banking,
Business and Commercial Banking
and Insurance. In his free time Kevin
is an amateur gardener and loves
cooking and reading.
Bonus Draw winnersJune 2018
Congratulations and well done to
our previous winners who all
chose between Petrol and
Supermarket Giftcards as their
prize.
The bonus draw is six random
selections made from our current
investors, paid for by First
Mortgage Managers Limited (not
First Mortgage Trust), which
means it has no effect on the
return to investors.
1 trust - Matamata
1 individual - Dargaville
4 individuals - Tauranga
Two new walking groups have been
added to Sport Bay of Plenty’s City on
its Feet programme, creating more
opportunities within the community for
people to get active more often.
City on its Feet, supported by Tauranga
City Council, features more than 25 free
walking groups across the city and
Get Walking!New walking groups for
fitness, fun and friendshipssurrounds, including Papamoa East,
Omanawa (lower Kaimais), Pyes Pa,
Bethlehem and more. These are
organised and supported by a group of
volunteer Group Captains, who help
keep participants motivated.
Two new groups have been added in Te
Puke and Mount Maunganui. No matter
your age or ability, walking groups are of
huge benefit, and with our lives
becoming increasingly sedentary,
there’s no easier (or cheaper) way to
keep moving on a regular basis.
Recreation Advisor Michelle Barns says
“It’s not just about the physical aspect –
participants really enjoy the social
environment of the groups; being able to
meet up each week and chat as they
walk. Many people have made new,
For more information about City
on its Feet, as well as a full
timetable of walking groups, visit
www.sportbop.co.nz/get-
active/city-on-its-feet/
If you, or someone you know,
would like to become a Group
Captain for the Te Puke or Mount
Maunganui walking groups,
please contact Michelle on
or 027 441 2164.
In recent years the Government has
made a number o f changes to
regulations in the financial services
space.
The changes have been made to
improve business practices and the
moni tor ing and enforcement of
legislation. As a licenced financial
service provider, we monitor our
business activities to ensure alignment
with legislation and also best practice.
We are now required to request
information regarding our Account
Holders and their controlling persons'
tax residency. This includes requesting
that Account Holders (investors), their
controlling persons and in some
instances beneficiaries complete a self-
certification form.
What is the AEOI?
AEOI is the exchange of financial
account information between Tax
Authorities in relevant countries. The
law requires this information to be
collected by Financial Institutions
around the world for reporting to Tax
Authorities.
AEOI is made up of two information
sharing frameworks:
l The Foreign Account Tax Compliance
Act (FATCA) which is a US framework
to identify US citizens and tax
residents with accounts in foreign
(non-US) jurisdictions; and
l The Common Reporting Standard
(CRS) under which details of foreign
tax resident accounts are shared
between participating Governments
(56 at present).
Under the AEOI , a l l F inanc ia l
Institutions (including First Mortgage
Managers Limited – “FMM”) must
identify accounts held by customers
who are foreign tax residents as well as
foreign tax residents (individuals or
entities) connected with an account.
Financial Institutions must report these
to the relevant Tax Authority who will
then automatically exchange the
account information with the relevant
foreign Tax Authority(ies).
Governments (in countries committed to
the AEOI) have enacted domestic laws
to require Financial Institutions to
collect and report this information and
have entered into internat ional
agreements to exchange the information
with other Governments.
What does this mean for First
Mortgage Trust's Existing
Individual and Entity Customers?
If you have an existing account, and/or
meet certain thresholds then we are
required to confirm your country(ies) tax
residence.
To enable FMM to meet this obligation
we will be requesting a self-certification
form be completed for the account
holder. Where controlling person(s) are
identified, then they too must complete
an individual self-certification form.
Where a distribution has been made to a
beneficiary(ies) of a trust, they are
considered to be a controlling person
and are also required to complete a self-
certification form.
Further information including the self-
certification forms can be obtained from
our office or downloaded from our
website www.fmt.co.nz. Navigate the
web page as follows: Documents,
Online Documents, Other Investment
Forms and Products, FMT Tax Residency
form – Individual or FMM Tax Residency
Form – Entity.
Upon receipt and following assessment
of the completed forms, we may request
additional information. This is to
establish whether you have accounts
that need to be reported under the
FATCA or CRS laws.
Where can I find further
information?
A Customer Tax Residency Information
sheet is available from our office or on
our website, as described above. This
provides further information regarding
the legislation and information being
requested. It also provides details of the
Inland Revenue sites which have further
resources avai lable to ass is t in
understanding these obligations.
Again – thank you for your continued
support of First Mortgage Trust.
long-lasting friendships, as well as
improved their physical and mental
wellbeing.
“There are so many beautiful places to
walk around the city, and while we have
many areas covered we’re always
looking to add more groups. If anyone
wants to set up a group in a new location
or at a new time, they’re welcome and
we’d love to hear from them.”
The City on its Feet walking groups are
always welcoming new participants of
any age or ability, and have groups
across the Western Bay of Plenty.
Customer Tax Residency Self-Certification– Automatic Exchange of Information (AEOI)
PLEASE DIARISE THESE DATES
Investor withdrawals - September 2018 -
We advise our last day for
investor withdrawals at the end
of the quarter is
Monday 24 September.
Completed and signed Notices
of withdrawal will need to be
received on or before
Friday 21 September.
Our normal Monday and
Thursday pattern will resume
from Monday 1st October for
investor withdrawals for the
quarter, with completed and
signed Notices of withdrawal
required by close
of business the previous day.
First Mortgage Trust - Toll Free 0800 321 113 [email protected] | www.fmt.co.nz
RECIPE
GARDENING
1 cup cooked black lentils
1 large onion, chopped
1 hard-boiled egg
Salt and black pepper
Dash of oil
Method:
l Fry the onions, until soft.
l Blend all the ingredients together,
until smooth.
l Season to taste. If the texture is too
stiff, add a little more oil.
Will keep in the fridge for four days.
Delicious vegetarian pate
Many fragrant flowers like daphne and
viburnum are in bloom this month and
roses, lily of the valley, forget-me-nots,
calendula, polyanthus, snapdragons
and pansies are just some of the
gorgeous flowers that are available for
planting.
Although it can be dreary and cold
outside, colourful potted plants work
wonders to brighten up the garden.
At this time of year you can grow leafy
green crops such as spinach, silverbeet
or kale in pots, however these will
need to be in a warm, sheltered place.
Beetroot, broad beans, carrot and
lettuce can be sown straight into the
garden, but only in warmer areas, and
Brassicas such as broccoli, cauliflower
and cabbage can be sown in trays or
punnets for planting out when plants
are a good size (usually after 4-6
weeks). Plant onion seedlings now so
that the bulbs will be forming as the
weather warms. Well-drained soil and
plenty of organic matter are a must.
Winter is also a good time to plant fruit
trees. If you're planting a windy area,
stake them for the first season. Plant
lemons in a sunny position sheltered
from frosts.
Slugs and snails will still be active and
munching through tender shoots so
they will need to be controlled. Keep
on top of weeds so that these don't
give you any issues in spring. This is
also a good time of year to get all your
tools sharpened and fixed, ready for
spring time.
In the Garden
TRAVEL
Some will holiday resting with their feet
up, others prefer feet on the ground
walking farther and higher than ever
before. Some of those feet will reach Mt
Everest Base camp as mine did a few
years ago… the time and effort well
worthwhile.
Le t 's backt rack to where these
adventures began! It's likely we
associate Everest with one of our great
New Zealanders, Sir Edmund Hillary.
Just mentioning his name stirs adventure
within many Kiwi bones. Most of us
have considered 'doing something like
this one day' and nowadays it seems,
many of us can.
Nepal offers New Zealanders a genuine
welcome. Kathmandu will wrap you in
everything an adventurous holiday
should. Safe, yet challenging, it's a
strangely comfortable place to spend a
few days pre or post any Himalayan
adventure. Kathmandu is generally the
starting point for a myriad of trekking
Enquiries to: Shane Kennedy (Owner Operator)
House of Travel TaurangaCnr Willow and Spring Streets
Tauranga Email: [email protected]
Nepal and the Himalaya mountainsBy Shane Kennedy
and climbing adventures and also the
place you'll return to for a warm bed, a
cold beer, and reflection on where your
feet have just taken you.
My adventure was a 30 day trek with
base camp Mt Everest the prize. Other
options include a comfortable four or
five days in the Annapurna range
offering quick access to the base of
enormous mountain ranges without the
altitude challenges that Everest presents.
Trek independently or join a myriad of
guided companies – the choices can be
focused on cost, time, and your level of
fitness. If your next holiday becomes a
feet forward approach rather than feet
up, know that you can mix and match
the two by enjoying a few beachy days
on the way home…easily achieved and
very popular.
Somehow after challenging yourself to
walk in the footsteps of heroes we can
come home better people, humbled by
what Nepal offers and appreciative of
Many Kiwi's have an intrepid
spirit, a little bit of adventure
in their bones.
what home offers us too. With our world
increasingly accessible, the only barriers
to achieving your Hillary moment is the
courage to actually give it a go. Holidays
are not competitions but expect to feel
rewarded for your efforts. You'll have
expe r i ence s t o r e f l e c t on and
achievements to be proud of for a
lifetime.
To consider visiting Nepal grab some
brochures, ask yourself 'what could my
Hillary moment be?' and then have the
courage and fortitude to give it a go.
A growing issue in
New ZealandNew Zealand has an ageing population
and an increasing number of people
with dementia.
In 2011, there were an estimated 48,000
New Zealanders with dementia, an
increase of nearly 20 percent since
2008. By 2026, this number is estimated
to balloon to over 78,000.
Dementia care needs to be improved
nationwide in a way that maximises the
independence and wellbeing of people
with dementia and their families, while
ensuring safety and affordability of
services.
A new model of careThe Care Village opened at the end of
2017. It is operated by a not-for-profit
charitable trust.
Based on the renowned Dutch village
called “De Hogeweyk” (pronounced De
Hogeway), the CARE Village is a world-
leading dementia and aged-care
community on the shores of Lake
Rotorua. It is the only one of its type
outside of Holland.
The CARE Village was founded on the
belief that there had to be a better way of
delivering aged care - one which not
only preserved the lifestyles of those
needing care, but also challenged
traditional institutional practices in the
wider industry
The vision is to create a lifestyle that
provides people with dementia with a
relatively normal existence. We believe
tha t fami l ia r i ty, comfor t and a
stimulating environment have the
greatest impact on overall health,
happiness and wellbeing.
The Care Village replicates a small-scale
New Zealand town and is designed to
allow people to live in households. This
environment creates a foundation of
independence, home and community,
with professional support and carers
nearby.
Each of the 13 single-level six and seven
bedroom households look and function
like a typical home. They reflect
extensive research that people with
dementia are much happier when they
live in an environment they recognise as
home. The houses have also been
designed and decorated differently, to
reflect the lifestyles people are most
familiar with.
Highly skilled staff, along with the latest
in technology, provide residents with the
freedom to move about the Village in a
safe and constant environment. Where
possible, residents are also able to come
and go from the Village as they please.
Residents are not locked away in a
secure ward.
When all stages are completed, the
village will also include a café,
hairdresser and clubrooms, all of which
will be open to the wider community as
well. In the meantime, residents can
enjoy the small market, the gardens and
lakeside promenade.
Any inquiries about
The CARE Village can be directed
to Therese Jeffs on 07 347 9612 or
The CARE Village in Ngongotaha – A World-Leading Dementia and Aged Care FacilityArticle prepared by Simon Collett (Chairperson)