On 20 May 2025, the Reserve Bank of Australia (RBA) reduced the official cash rate by 25 basis points to 3.85%, marking the second rate cut in 2025 and the first since the federal election. The RBA is responding to a slowing economy, with subdued household spending, rising unemployment, and easing inflation continuing to shape its outlook.
This latest decision follows the RBA’s earlier decision in February 2025 to lower the cash rate from 4.35% to 4.10%. That February move returned the rate to a level last seen in October 2023, when it remained at 4.10% for four consecutive months. The RBA chose to hold the rate steady in April, before this latest May reduction.
According to the RBA’s statement, trimmed mean inflation has eased to 2.9% and headline inflation to 2.4%, both now within the Bank’s 2-3% target range. The Board also noted growing uncertainty around global growth and domestic demand.
Read the full media release by the Reserve Bank of Australia here:
RBA Media Release 20 May 2025.
As this rate cycle begins to shift, Skyring remains focused on what matters most to our investors - stability, income consistency, and capital preservation.
After a prolonged period of high interest rates, this year’s cuts mark a meaningful shift in policy. Economists now expect further easing over the next 6–12 months, with some forecasts pointing to a cash rate near 3.10% by early 2026, should economic softness persist.
As traditional savings and income products adjust downward, investors are increasingly seeking stable, income-focused options that can withstand market fluctuations.
The Skyring Fixed Income Fund continues to offer stability and a strong income stream. The Fund’s current indicative distribution rate is 7.30%^ per annum, a level that has been maintained since May 2024, following an increase from 7.05%. This continues a trend of steady growth, with the Fund offering no reductions to its distribution rate in over two years.
At a time when many traditional income products are beginning to adjust downward, we’re proud of our consistent track record. Our approach remains focused on capital preservation, income reliability, and a disciplined investment process that seeks to deliver dependable monthly returns to investors.
In response to continued demand for income certainty, Skyring has opened a Bonus Class within the Skyring Fixed Income Fund. This Bonus Class offers a 1% per annum increase on top of the standard base rate, bringing the current indicative return to 8.30%^ per annum. It is available for applications made before 30 June 2025, and the bonus rate applies until 30 April 2026, after which investments will revert to the Fund’s base distribution rate at that time.
This limited-time opportunity is designed to support investors seeking to maximise income during a period of broader market adjustment and interest rate declines.
For those willing to invest for a longer minimum period, the Skyring Platinum Fixed Income Fund provides a tailored income solution with competitive indicative distribution rates across multiple terms. The current indicative rate for the 12-month term is 8.15%^ per annum, while the 24-month term offers 8.25%^ per annum, and the 36-month term delivers 8.05%^ per annum.
These rates reflect increases introduced in April 2024, when each class was revised upward by over 1% from the previous levels. The Skyring Platinum Fixed Income Fund offers a flexible structure for investors seeking greater certainty, and while rates are variable, they are backed by the same investment discipline and income-focused approach that underpins all Skyring funds.
With the RBA continuing its easing cycle and further rate changes anticipated, investors are increasingly seeking income strategies that offer consistency and discipline in a lower-rate setting. Both the Skyring Fixed Income Fund and Skyring Platinum Fixed Income Fund remain focused on delivering reliable income through a transparent and actively managed process.
To learn more about the Skyring Income Funds or to request an application form, contact our team at investor@skyring.com.au or call 1300 73 72 74.
The Bonus Class for the Skyring Fixed Income Fund is open for a limited time and will close on 30 June 2025.
Learn more about how to invest with Skyring:
Sources:
RBA, ABC, Westpac, NAB, AFR, CBA
Navigating the Shifting Rate Environment
A Shift in Monetary Policy
Skyring Fixed Income Fund
Limited Time Opportunity - Bonus Class Offer Available until June 30
Skyring Platinum Fixed Income Fund
Supporting Investors in a Lower Rate Environment
