La Trobe 12 Month Account vs direct mortgage investing: a structural comparison

The La Trobe 12 Month Account is a class of a large pooled credit fund: you hold units in the fund, which lends across many mortgages. Direct mortgage investing means lending into one specific loan you choose, with your name on the registered mortgage. As at September 2026 they differ on rate, minimum, access and control, and suit different investors.

This comparison is about structure, not quality. La Trobe Financial is a large, long-established Australian credit manager, and its fund carries a long list of research ratings and industry awards. HomeSec Business Finance, an Australian private lender founded in 2004, offers something built differently: wholesale investors co-fund individual short term business loans alongside HomeSec’s own money. Understanding the difference helps you decide which tool fits which part of your capital.

What is the La Trobe 12 Month Account?

The 12 Month Account is an investment option in the La Trobe Australian Credit Fund, a pooled fund that invests in mortgage assets and Australian cash. ASIC has described the fund as investing almost entirely in loans secured by registered first mortgages.

Key features, as published by La Trobe in September 2026:

• Rate: 6.75% p.a., variable and reviewed monthly.
• Minimum: $1.
• Term: a 12-month account, with income distributed monthly.
• Recognition: La Trobe lists awards including Money magazine’s Best Credit Fund – Mortgages, and ratings from research houses including Zenith, SQM Research and Lonsec.

La Trobe states that it makes every endeavour to release funds within two business days of a withdrawal request, while noting the fund’s constitution allows a longer period. It also states that no investor has lost invested capital since the fund’s inception in 2001.

What happened with the ASIC stop order?

On 18 September 2025, ASIC made interim design and distribution stop orders on the fund’s 12 Month and 2 Year accounts. ASIC’s concern was with the target market determinations, the documents that describe who a product is suitable for. It considered they suggested an inappropriate level of portfolio allocation given the fund’s risks and did not include appropriate distribution conditions.

Six days later, on 24 September 2025, ASIC revoked the orders. La Trobe had amended the determinations, reducing the share of an investor’s investable assets considered appropriate for the products from 50% to 25%, and introducing a questionnaire-based screening process.

The episode was about how the product was described and distributed to retail investors. It is a useful reminder that even a well-regarded pooled fund is a concentrated exposure to one manager’s book, which is why the suggested allocation matters.

Was La Trobe affected by the Bathla collapse?

Only marginally, on the reported figures. When Sydney developer Bathla Group entered voluntary administration on 25 August 2026, Financial Standard reported that La Trobe had less than 0.15% exposure to the group through first mortgage loans, on a project 95% complete. The same report named several other managers with exposure to the group.

What is direct mortgage investing with HomeSec?

Direct mortgage investing means lending into a specific loan. HomeSec sources each loan, assesses it against a 50-point due diligence checklist and emails you a due diligence pack. You decide whether to fund it and how much. If you proceed, the loan agreement is prepared in your name, and you are named on the registered mortgage (or caveat, where that is the security) for your exact contribution, alongside HomeSec.

The loans are short term business loans of 1 to 12 months, secured by registered first and second mortgages over Australian real estate, with a maximum 80% LVR on residential property and lower on commercial. HomeSec does not make development or construction loans. It co-invests its own money in every loan it offers, and principal and interest are paid straight to your own bank account. Our guide to how it works sets out each step.

How do the two compare, structure by structure?

Neither structure is covered by the government’s Financial Claims Scheme, which protects bank deposits, not investment funds or private loans.

Why is there such a gap in rates?

The difference, roughly 6.75% against 12% to 18%, reflects what each structure is and what it is paying for.

A large pooled fund lends across a broad book, holds cash for liquidity, and offers a product open to investors from $1 with regular distributions. Those features have real value, and they come at a cost to the headline rate.

HomeSec’s rates reflect the loans themselves. Borrowers, mostly established businesses using equity in property, pay a premium for speed: letters of offer in hours and settlement possible within days, for terms of 1 to 12 months. The investor, in turn, puts from $100,000 into each loan, accepts concentration in individual loans and takes on the responsibility of choosing. For context, the best 12-month term deposits were paying about 5.3% to 5.5% in September 2026.

How does getting your money back differ?

In a pooled fund, you ask the manager to redeem your investment, and the manager pays you from the fund’s cash and incoming repayments, under the fund’s terms. Usually, that works smoothly. The constitution sets the outer limits.

With a direct loan, there is no pool and no redemption queue. Your principal and interest come back to your account when the borrower repays at maturity. If you need your money earlier, HomeSec will buy out your share and repay your principal. And you can stop at any time: once your current loans are repaid, you simply don’t take the next one. The detail is in getting your money back.

What are the honest trade-offs of each?

Every structure gives something up to get something else.

What a pooled account gives you: a very low minimum, diversification across a large book from a single holding, monthly distributions, and no decisions after you invest. What it asks of you: you rely on the manager’s loan selection and reporting, the rate is variable and lower, and access depends on the fund’s terms rather than on any one loan.

What direct co-funding gives you: a choice on every loan, a full pack to read first, your name on the registered mortgage, HomeSec’s own money in the same loan, higher rates and repayments straight to your bank account. What it asks of you: wholesale status, a contribution of $100,000 or more per loan, a decision on each loan, and building diversification across several loans, properties and states over time.

Neither list is a criticism of the other product. They describe different designs.

Can an SMSF use either?

Yes, subject to the fund’s own rules. SMSF trustees commonly co-fund loans with HomeSec, with the loan in the name of the SMSF trustee. Whichever option a trustee considers, they should check that the trust deed and investment strategy allow it, and think about how the holding fits the fund’s liquidity needs for pensions and other payments.

Which suits which investor?

The La Trobe 12 Month Account may suit you if you are investing a modest amount, want broad diversification from a single holding, prefer not to review individual loans, and are comfortable with a rate in the mid single digits in exchange for that simplicity.

Direct co-funding may suit you if you are a wholesale or sophisticated investor with $100,000 or more to place in a loan, you want to see and choose each loan, you want your name on the mortgage and repayments straight to your account, and you are comfortable building diversification loan by loan. Our page on wholesale investors explains how to qualify.

Plenty of investors hold both: a pooled account for smaller, hands-off balances and direct loans for a larger allocation where control and yield matter more. Our comparison of direct mortgage investment vs pooled funds goes further into the general trade-offs.

Want to compare a real loan pack with your current statement?

The clearest comparison is side by side. If you’d like to see a HomeSec loan pack next to your fund statement, register your interest and our Funding Manager will be in touch.