Kiwi Private Credit Fund returned 0.49% in May, extending its profitability streak to 34 consecutive months. Year to date return is 2.9% or 5.8% on an annualized basis. Fund assets experienced increased delinquency in March and April due to COVID-19 but this stabilized in May and further improved in June.
The overall credit trend in June was positive, led by consumer credit which has proven remarkably resilient. Although heightened risk persists, we are seeing the positive effect of government support programs as well as reduced delinquency amongst those not requiring government support. Due to the pandemic, people are spending less and therefore have cashflow to service their obligations.
Small business credit performance is also improved since March, with the US economy increasingly open, as well as increased liquidity provided by the US Paycheck Protection Plan loans that have been made widely available by the US government.
Real Estate performance has stabilized and is expected to improve in the coming months as construction projects complete and properties can be refinanced.
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