ASIC has made interim stop orders against two products offered under the Australian Fixed Income Fund (Fund) operated by Stratfund Limited (Stratfund) to protect consumers from acquiring products that may not be suitable for their financial objectives, situation, or needs.

ASIC has issued the stop orders against the Wealthon Vault Development Fund and The People’s Equity Fund products due to deficiencies in the target market determinations (TMD) for both products.

ASIC is concerned that the TMD for the Wealthon Vault Development Fund inappropriately suggests the target market includes retail investors:

• seeking an investment goal of capital preservation or income distribution when the product is not designed to meet these objectives
• who intend to hold their interest in the product as a core component (25-75%) of their investable assets
• with an investment timeframe greater than three years where there is a four-year minimum investment term, and 
• with a need to withdraw money on an annual basis.

ASIC is concerned that the TMD for The People’s Equity Fund inappropriately suggests the target market includes investors:

• seeking an investment objective of income distribution when distributions may not currently be paid
• who intend to hold the product as a core component (25-75%) of their investable assets, and
• with a need to withdraw money on an annual basis and potentially on a quarterly basis where there is a minimum investment term of three years and withdrawals are discretionary.

The interim orders prevent Stratfund from dealing in interests, giving a product disclosure statement for, or providing general financial product advice to, retail clients recommending an investment in the Wealthon Vault Development Fund and The People’s Equity Fund. The orders are valid for 21 days unless revoked earlier.

These stop orders arose from ASIC’s risk-based surveillance of managed investment schemes.

ASIC has a 2026 enforcement priority focused on poor private credit practices including retail private credit funds focused on fund transparency, governance, valuation practices, management of conflicts of interest and fair treatment of investors, conducted as part of its response to Australia’s evolving capital markets. The Wealthon Vault Development Fund is a private credit fund.

Background

The Fund has 12 products with different investment terms, yield and characteristics. At 30 June 2025 the Fund had approximately $15 million in funds under management.

The Wealthon Vault Development Fund invests in a portfolio of secured development loans to SPVs undertaking approved property developments. The People’s Equity Fund invests in shared equity investments with exposure to residential property and residential properties.

Stratfund promotes itself as a an AFS licensee specialising in authorised intermediary, trustee and AFS licence compliance services.

To date, ASIC has issued 97 interim stop orders and two final stop orders under the design and distribution obligations (DDO) since the inception of the regime.

Under DDO, financial product issuers and distributors must ensure the product’s TMD is clear and appropriately defines the target market, accurately reflects the product’s risks and features and includes appropriate distribution conditions. 

Where firms are not doing the right thing, ASIC can take quick action under DDO to disrupt poor conduct and prevent potential consumer harm.