The Woodbridge Private Credit Fund – A Hedge Against Inflation

With the announcement on the 3rd May 2022 that the Reserve Bank of Australia is raising the official cash rate by 25bps to 0.35% – it’s all good news for our investors.

Why? Because one of the unique characteristics of the Woodbridge Private Credit Fund, is that the fund has floating loan rates that are linked to the Bank Bill Swap Rate (BBSW). BBSW is correlated with the RBA cash rate.

The market has now shifted to a rising interest rate environment with several future interest rate rises expected on top of today’s rate increase given inflation figures. Rising interest rates and interest rate expectations lead to an increase in fund returns for our investors as these are fully passed on through the floating loan rates - thus providing a hedge against inflation.

Traditionally during above average inflation periods, equities and fixed income asset classes underperform which has been in line with recent market performance for both asset classes. The Woodbridge Private Credit Fund provides a diversification benefit for investors’ portfolios due to the funds' ability to act as a hedge against inflation and provide income and capital protection.