Fund Manager Summary
The fund managers believe there is a positive outlook for Australian Finance Group Ltd as it stands to benefit from improving housing market dynamics. In their opinion, the company’s robust network of over 4,000 mortgage brokers positions it well to capitalize on growth opportunities within the loan manufacturing and distribution business segments. This strategic advantage is expected to enhance its market presence and profitability, making it an attractive investment choice for those looking to leverage the current trends in the housing sector.
Source: Trading View
Commentary From The Managers
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Endeavor Asset Management
31 Oct 2025
$2.38
Summary
- Endeavor Asset Management notes that shares in Australian Finance Group (AFG) experienced volatility due to changing expectations around the domestic cash rate.
- Discussions with management at AFG’s annual general meeting revealed continued momentum in AFG’s direct lending division.
- There has been further improvement in unit economics, indicating positive operational developments.
- Despite a constructive medium-term outlook, Endeavor Asset Management decided to trim their position.
- This decision was made to lock in gains following recent strength and to adapt to the changing macro conditions.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Endeavor Asset Management
31 Oct 2025
$2.38
- Endeavor Asset Management notes that shares in Australian Finance Group (AFG) experienced volatility due to changing expectations around the domestic cash rate.
- Discussions with management at AFG’s annual general meeting revealed continued momentum in AFG’s direct lending division.
- There has been further improvement in unit economics, indicating positive operational developments.
- Despite a constructive medium-term outlook, Endeavor Asset Management decided to trim their position.
- This decision was made to lock in gains following recent strength and to adapt to the changing macro conditions.
Summary
Endeavor Asset Management
30 Sept 2025
$2.60
- Endeavor Asset Management continues to hold a positive outlook on Australian Finance Group Ltd.
- The First Home Buyer scheme by the Australian government is expected to benefit banks significantly.
- This scheme supports loans at up to 95% LVR with government guarantees on portions above 80%.
- Lenders can earn interest on the full loan while managing risk similar to an 80% LVR exposure.
- The guaranteed segment is backed by the AAA rated Commonwealth, which reduces risk weighted assets.
- This reduction in risk weighted assets enhances regulatory capital and improves efficiency metrics like ROE.
- Endeavor expects portfolio positions in NAB, Westpac, Macquarie, and AFG to benefit from this policy.
Summary
Ellerston Capital
31 Aug 2025
$2.78
- Australian Finance Group (AFG AU) was the strongest performer, rallying 26% during the month.
- The company delivered a stronger-than-expected FY25 result, with net interest margins surprising to the upside.
- Ellerston Capital believes AFG is in a real sweet spot due to ongoing rate cuts driving stronger demand for housing credit.
- Lowering funding costs are contributing to AFG's growth, alongside tight operating expenses leading to significant operating leverage in the second half.
- These supportive dynamics are likely to persist over the foreseeable future.
- AFG continues to benefit from a structural shift toward mortgage broking over direct lending, reinforcing its growth runway.
Summary
Endeavor Asset Management
31 Aug 2025
$2.78
- Endeavor Asset Management notes that Australian Finance Group (AFG) was a standout contributor in August following a solid FY25 result.
- Material growth in loan settlements supported higher earnings across the board.
- Gross profit per broker has lifted significantly.
- EBITDA rose 19% year-on-year, outpacing income growth of 15%.
- Management commentary indicates accelerating profit growth into FY26.
- Valuation remains undemanding at ~16x P/E with an expected 4.4% dividend yield.
- AFG shares increased 26% over the month.
Summary
Blackwattle Investment Partners
31 Aug 2025
$2.78
- Blackwattle Investment Partners continues to hold a positive outlook on Australian Finance Group Ltd.
- Australian Finance Group is recognized as one of Australia’s largest mortgage aggregators and securitised home loan lenders.
- In August, shares increased by 26.1%, driven by a strong performance that exceeded consensus expectations.
- AFG experienced its highest residential lodgment month in July, indicating robust operational momentum.
- The company is benefiting from positive trends in national house prices and an anticipated RBA rate cut for 2025.
- This environment is expected to boost mortgage activity and enhance AFG’s competitive position against banks.
- AFG’s current valuation is compelling, trading at 15x P/E with expected mid-teens earnings growth.
- The firm offers a ~5% fully franked dividend yield, making it an attractive investment option.
Summary
Seneca Financial Solutions
31 Aug 2025
$2.78
- Seneca Financial Solutions notes a 26% rise in Australian Finance Group (AFG) following a 21% profit growth.
- AFG has maintained its status as a steady contributor and dividend payer throughout the fund's life.
- The company is supported by its market-leading aggregation platform for mortgage brokers.
- AFG has been growing its own loan book, which has positively influenced market sentiment over the last six months.
Summary
Prime Value Asset Management
31 Aug 2025
$2.78
- Prime Value Asset Management continues to hold a positive outlook on Australian Finance Group (AFG) amidst the recovery in residential housing.
- AFG is positioned to benefit from increased demand for housing loans and lower costs of funds.
- Engagement with AFG's management highlighted the potential for benefits from declining interest rates due to easing monetary policy.
- AFG’s role as a mediator between mortgage borrowers and financial institutions is increasingly valued.
- The company has demonstrated growing value to both borrowers and financial institutions since Prime Value's investment began in 2019.
- There is a notable trend of higher annual share of home loans sourced through mortgage brokers compared to direct sourcing from financial institutions.
Summary
Wilson Asset Management
31 Aug 2025
$2.78
- Wilson Asset Management highlights that Australian Finance Group (AFG) is a leading mortgage aggregator and loan securitisation platform with over 4,200 brokers in its network.
- In FY2025, AFG reported revenue of $1.24 billion, representing a 15% increase.
- The company achieved a net profit after tax of $35.0 million, up 21% from the previous year.
- AFG's earnings per share (EPS) rose to $0.13, up from $0.11 in FY2024.
- Settlements in AFG's highest margin division, AFG Securities, increased by 65% to $2.7 billion.
- The total loan growth reached $5.5 billion, a 23% year-on-year increase.
- The withdrawal of NAB’s Advantedge business has created opportunities for AFG to capture a larger share of the white-label market.
- AFG is positioned to benefit from structural growth in broker distribution and the expanding white-label home loan segment.
Summary
Seneca Financial Solutions
30 June 2025
$2.29
- Seneca Financial Solutions continues to hold a positive outlook on Australian Finance Group (AFG).
- AFG demonstrated strong performance, with a gain of +21% in May, following a +14% increase in April.
- Broker forecasts indicate AFG could achieve $60 million in net profit by 2029.
- This projected profit is roughly double its current NPAT.
Summary
Seneca Financial Solutions
31 May 2025
$2.23
- Seneca Financial Solutions notes that Australian Finance Group (AFG) rose +21% due to a 24% increase in mortgage pre-approvals for the year ending March 2025, according to Equifax.
- A second-rate cut has fueled optimism that interest rates have peaked after recent inflationary pressures.
- In the last upcycle, AFG traded at $3.00, and Seneca Financial Solutions sees potential for it to reach that level again.
- Investors currently benefit from a 6.7% grossed up dividend yield.
- There is an expectation that this optimism will also positively impact another portfolio holding, Pexa (PXA), which holds a monopoly in property conveyancing in Australia.
- Pexa is anticipated to benefit from increased transaction volumes as they come off cyclical lows.
Summary
Endeavor Asset Management
31 May 2025
$2.23
- Endeavor Asset Management notes that shares in mortgage aggregator Australian Finance Group (AFG) rose 21% in May.
- The company is highly leveraged to a rate cutting cycle, with expectations that lower interest rates will stimulate loan volumes.
- This is anticipated to drive earnings across both its broker distribution business and direct lending book.
- Management received positive feedback during the conference circuit, indicating sustained longer-term growth.
- AFG currently trades on 14x forward earnings, which is a discount to its historical peak multiple of 18x.
- Endeavor believes this cycle presents the potential for higher quality, more consistent earnings, following a period of reinvestment and platform development during the COVID era.
Summary
Blackwattle Investment Partners
31 May 2025
$2.23
- Australian Finance Group is one of Australia’s largest mortgage aggregators and securitised home loan lenders.
- Shares rose 20.9% in May, supported by positive momentum in national house prices.
- Another RBA rate cut is anticipated, which is expected to drive increased mortgage activity.
- This environment should strengthen AFG’s competitiveness on mortgage lending relative to the banks.
- AFG’s valuation is compelling, trading on 15x P/E.
- Projected mid-teens earnings growth and a ~5% fully franked dividend yield.
- Blackwattle Investment Partners continues to hold because of these favorable conditions.
Summary
Prime Value Asset Management
29 May 2025
$2.19
- Australian Finance Group Ltd is currently an interesting investment opportunity.
- It is not well-known nor widely owned.
- The company operates as a mortgage broker aggregator with a network of 4000 brokers.
- These brokers account for 10% of all residential mortgages in Australia.
- The distribution business is stable and benefiting from recent system investments.
- AFG also manufactures mortgages and has improved its performance after a tough competition period.
- Significant volume growth is expected in FY26.
- Interest rate cuts are expected to positively impact the company.
- AFG is trading at a relatively low price-to-earnings multiple.
- Earnings momentum is accelerating, indicating a positive near-term outlook.
- Limited options to gain housing exposure due to fewer building materials companies listed.
- Expect AFG to become more widely owned in the near future.
Summary
Endeavor Asset Management
30 Apr 2025
$1.82
- Endeavor Asset Management notes a 14% increase in AFG's share price in April, driven by strong performance in loan lodgements during the March quarter.
- AFG Securities' lodgements have gained 20% market share year-on-year, compared to total market lodgements increasing by 18.5% year-on-year.
- AFG Securities products account for 56% of AFG's home loans.
- Expectations are for AFG to continue gaining market share in a favorable environment of decreasing rates and increasing loan activity.
- There are plans to expand this expertise into asset finance broking in the future.
Summary
Blackwattle Investment Partners
30 Apr 2025
$1.82
- Australian Finance Group (AFG) is recognized as one of Australia’s largest mortgage aggregators and securitised home loan lenders.
- Shares of AFG increased by 14.1% in April due to a rise in national house prices, which gained for the second consecutive month.
- The price increase followed a period of declines, influenced by expectations of RBA cash rate cuts.
- AFG released its March quarterly mortgage index, indicating ongoing strength in mortgage lodgment volume growth.
- Blackwattle Investment Partners continues to hold AFG as they foresee significant upside potential with expected near-term RBA rate cuts.
- These rate cuts are anticipated to drive increased mortgage activity and enhance AFG’s competitiveness in mortgage lending against banks.
- AFG’s current valuation is considered compelling, trading at 12x P/E, compared to a peak of 17x P/E during the last rate cutting cycle.
- Additionally, AFG offers a greater than 5% fully franked dividend yield.
Summary
Ellerston Capital
30 Apr 2025
$1.82
- Australia Financial Group (AFG AU) rallied 14% after a strong Q3 trading update.
- Total lodgements rose 18.5% year-on-year, with AFG Securities lodgements up 20%.
- Solid flows and easing runoff indicate material loan book growth ahead.
- Market expectations of more rate cuts and rational competitor behavior are likely to improve net interest margins.
- Broker acquisitions are gaining momentum, which should further support earnings.
- Ellerston Capital sees AFG as offering decent medium-term earnings growth at an undemanding valuation.
Summary
Endeavor Asset Management
30 Sept 2024
$1.60
- Endeavor Asset Management has initiated a position in Australian Finance Group (AFG)
- AFG is viewed as a beneficiary of improving housing market dynamics
- The company boasts a growing base of over 4,000 mortgage brokers
- These brokers provide opportunities for the loan manufacturing and distribution business segments
Summary
Ellerston Capital
31 Aug 2024
$1.60
- AFG was a solid performer, gaining around 9% during the month.
- The result was only marginally ahead of expectations, but the stock rallied as the market viewed this half as the trough for earnings.
- The AFG securities loan book returned to growth after a period of shrinkage due to intense competition from major banks.
- Normalising conditions have resulted in a stable NIM, with expectations for improvement from this level.
- AFG is well positioned to benefit from interest rate cuts, coupled with a growing loan book and improving NIM, which should drive earnings upgrades.
- The structural shift towards the mortgage broking channel for lending is expected to continue as major banks close branches.
- AFG remains a core position in the portfolio.
Summary
Oracle Advisory Group
31 Dec 2023
$1.60
- Increased competition from big banks with access to cheap funding due to COVID-19.
- AFG announced a cut to their dividend, indefinitely, to reinvest funds for business growth.
- Earnings forecast indicates a medium-term decline, despite a low Price/Earnings multiple.
- Oracle Advisory Group sold their investment as the original investment thesis did not align with current performance.
- Exited position at a price similar to entry, reflecting market conditions.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With the housing market showing signs of life, Australian Finance Group appears poised to capitalize on its robust network of over 4,000 mortgage brokers, potentially transforming challenges into opportunities for growth."
Last Updated: 31 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Australian Finance Group Ltd (ASX:AFG)?
Fund managers including Endeavor Asset Management, Prime Value Asset Management, Oracle Advisory Group, Blackwattle Investment Partners, Ellerston Capital, Seneca Financial Solutions and Wilson Asset Management have invested in Australian Finance Group Ltd (ASX:AFG).
Why do fund managers invest in Australian Finance Group Ltd?
Fund managers, including Endeavor Asset Management, invest in Australian Finance Group Ltd due to its strong position in the improving housing market. With over 4,000 mortgage brokers, AFG effectively capitalizes on loan manufacturing and distribution, presenting significant growth opportunities.
What happened to Australian Finance Group Ltd (ASX:AFG)?
Fund managers are investing in Australian Finance Group Ltd (AFG) due to its strong financial performance and market position as a leading mortgage aggregator. AFG reported a 21% profit growth and a record loan book, benefiting from a positive housing market and anticipated interest rate cuts. The company has shown consistent earnings growth, a compelling valuation at approximately 16x P/E, and a solid dividend yield of around 4.4%. Additionally, AFG is well-positioned to capture market share in the broker distribution space, driven by structural shifts in the mortgage industry.