The Contributory Fund

The VMIL Mortgage Fund (Contributory Fund) offers you the opportunity to select a specific secured loan in which to invest. Returns reflect the interest on the specific loan you select.

The Contributory Fund is a registered managed investment scheme which offers you the opportunity to invest in specific fixed term mortgage investments, in which the primary security is a registered first mortgage (or mortgages) over a diversified selection of non-specialised residential, commercial, retail and industrial properties in Australian capital cities and major regional centres (having a permanent population base of at least 25,000). The mortgages are registered in the name of VMIL as the responsible entity of the Contributory Fund.

Each mortgage investment is known as a Sub-Scheme and you contribute your investment money to one or more Sub-Schemes. Your entitlement to income or capital is then based on your proportionate investment in the mortgage loan comprising each Sub-Scheme. There is no right to income or capital of other Sub-Schemes.

When you initially invest, unless you have already approved a Sub-Scheme, your investment money is placed into a Cash Management Trust. VMIL will then forward you an Investment Advice and Approval Form with details of a particular mortgage investment (or Sub-Scheme). Your investment money is retained in the Cash Management Trust until allocated to a particular Sub-Scheme. Your investment money will only be allocated to a particular Sub-Scheme when you have returned a signed Approval Form.

Key Features of Sub-Scheme Investments

• Security
  Each Sub-Scheme loan is secured by a registered first mortgage over real property in Australia. Security property may, or may not be income producing, and the loan amounts will be generally up to 70%, but no more than 75% of the assessed market value of the security property.
• Entry Fee
  Nil.
  
• Exit Fee on expiry of Investment Term
  Nil.
• Ongoing Investor Fees
  Fees and costs relating to each Sub-Scheme are generally borne by the borrowers. A Management fee may be deducted if specified in the Investment Advice.
• Fixed Interest Rate
  Interest rates for each Sub-Scheme loan are generally fixed for the Investment Term. If so, interest is payable at the applicable fixed rate from the date your investment money is allocated to the Sub-Scheme. The Investment Advice will specify whether the interest rate for a Sub-Scheme is fixed or variable.
• Minimum Investment
  $5,000 but VMIL may accept lesser amounts at its discretion. You may also make additional investments in multiples of $5,000.
• Maximum Investment
  Unlimited but at VMIL's discretion.
  
• Investment Term
  Depends on the specific Sub-Scheme you select, but usually for a maximum term of 24 months.
  
• Payment Method
  Direct credit to your nominated bank account is the preferred form of payment.
  
• Payment of Interest
  Usually monthly in arrears depending on the Sub-Scheme. VMIL does not generally underwrite the timely payment of interest during the Investment Term. However (subject to availability of funds) VMIL may exercise its discretion to underwrite prompt payments of interest, in which case it may retain any penalty interest payable by the borrower.
  
• Withdrawals
  There is no right to withdraw your mortgage investment money from a Sub-Scheme during the Investment Term. If the borrower repays the loan early or a replacement investor is willing to accept the terms and conditions of a current Sub-Scheme mortgage loan, it may be possible to accommodate a withdrawal request, but you will be charged any costs and fees incurred in replacing your mortgage investment. VMIL makes no representation that early withdrawal is possible for any particular Sub-Scheme.