Yep, i sold all my Metrics Income Opportunities Trust (MOT) and Metrics Master Income Trust (MXT) as the dividends just kept dropping.
After careful consideration and growing concern, I have made the decision to liquidate my entire position in both the Metrics Income Opportunities Trust (MOT) and the Metrics Master Income Trust (MXT). This decision was primarily driven by the alarming trend of declining dividend distributions, particularly evident in MOT.
The following table illustrates the consistent downward trajectory of MOT’s monthly distributions over the past eight months:
| Date | Distribution (AUD) |
|---|---|
| 31/05/2024 | $0.0127 |
| 30/04/2024 | $0.0140 |
| 02/04/2024 | $0.0146 |
| 29/02/2024 | $0.0163 |
| 31/01/2024 | $0.0166 |
| 29/12/2023 | $0.0168 |
| 30/11/2023 | $0.0206 |
| 31/10/2023 | $0.0199 |
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As the data reveals, the distributions have plummeted by approximately 40% from the peak observed in November 2023. This significant decline has occurred despite a relatively stable interest rate environment in Australia. This is a crucial point, as the trusts’ income is largely derived from interest on loans and equity deals.
Key Concerns and Analysis:
The lack of transparency surrounding this substantial reduction in distributions raises serious questions. As a unit holder, I am entitled to clarity regarding the factors influencing the trust’s performance. Potential causes for this decline could include:
- Increased Borrower Defaults: Have a significant number of borrowers defaulted on their loan obligations, impacting the trust’s income?
- Impairment of Equity Deals: Have any of the trust’s equity investments underperformed or resulted in losses?
- Changes in Lending Practices: Has there been a shift in the trust’s lending practices, leading to lower interest income?
- Increased Operating Expenses: Have operational costs risen unexpectedly, eating into distributable income?
- Impact of recent unit issuance: Were the new units issued dilutive to existing unitholders?
The company’s failure to address these concerns adequately is deeply troubling. Instead of providing detailed explanations, there has been a noticeable increase in marketing efforts aimed at attracting new investors. While these efforts may boost demand and potentially increase unit prices in the short term, they do not address the fundamental issue of declining income.
Decision Rationale and Future Outlook:
As a responsible investor, I cannot justify maintaining a position in a trust that exhibits such a lack of transparency and a consistent decline in income. While I acknowledge that I realized a capital gain on my investment and received some dividends, the long-term implications of these trends are unacceptable.
Therefore, I have decided to completely divest my holdings in both MOT and MXT. Given the current circumstances, I have lost confidence in the management’s ability to effectively manage the trusts and prioritize unit holder interests.
Looking ahead, I am highly unlikely to reinvest in any Metrix-managed entities. The lack of clear communication and the unexplained decline in distributions have eroded my trust in the company’s governance and operational practices.
In Conclusion:
This decision was not made lightly. I believe that transparency and accountability are paramount in any investment. When these principles are compromised, as I feel they have been in this case, it is essential to take decisive action.
Metrix, consider this my formal notice: You’re Fired!