Mortgage Fund

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Mortgage Fund

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A type of managed fund within the fixed interest asset class. The money invested in a mortgage fund is
lent out in the form of mortgages or is invested in other mortgage funds.

Mortgage funds are relatively conservative investments and should be viewed as a medium term
investment. They are not without risk. Two key risks are:

1. Liquidity the risk that you cannot easily convert your investment to cash this is known as fund
freezing.

2. Default risk the risk that borrowers default on the underlying loans of the fund.