In investing, the most powerful force often isn’t flashy. It’s quiet, consistent, and happens in the background. It’s called compound interest - and it rewards time, not timing. At its core, compounding is about earning interest on your interest. As your investment earns income, and that income is reinvested, your balance grows faster — even if you never contribute another dollar.
Compound interest is the process of earning interest not just on your original investment, but also on the returns that the investment has already generated. This creates a "snowball effect" — where your investment can grow faster the longer you stay invested.
Here's a simple way to think about it:
That reinvestment, repeated over time, is what gives compound interest its power. It may feel small at first, but over years, the difference can become substantial.
The Skyring Fixed Income Fund offers the option to reinvest your monthly returns automatically through our Distribution Reinvestment Plan (DRP).
Rather than receiving distributions as monthly income, the DRP allows you to reinvest them into additional units of the Fund.
You can:
It’s a simple way to allow your income to continue working for you — with no additional effort required.
Here’s a simple illustration of how compounding monthly returns can build over time, assuming an initial investment of $10,000. This scenario uses the current 1% bonus distribution rate offer (available until 30 April 2026) giving an indicative distribution rate of 8.30% p.a. for the first 10 months, followed by the ongoing rate of indicative distribution rate of 7.30% p.a. thereafter (note the rate is variable, and can change). Distributions are reinvested each month under the DRP.
† Example only. Indicative rates shown; actual future rates may vary.
Reinvesting your returns can help your money work harder for you over time. Through the Skyring Fixed Income Fund’s DRP, compounding becomes simple and automatic — and for investors with a longer-term outlook, that can make a real difference.
To activate or update your DRP selection, reach out to the Skyring team or request a Reinvestment Instruction Form. We're here to help you get the most from your investment strategy.
At Skyring, we are a boutique non-bank Australian income manager directly accountable to our investors. Our primary goal is to provide regular income solutions that support the ongoing success of your portfolio.
Through our Skyring Fixed Income Fund and
Skyring Platinum Fixed Income Fund, investors can start with a minimum investment of $1,000, with distributions paid monthly.
Our funds are suitable for a variety of investors, including individuals, companies, self-managed super funds (SMSFs), and trusts. We pride ourselves on transparency, with no entry or exit fees, and a straightforward online application process that can be completed in approximately ten minutes.
To explore how Skyring can assist you in achieving your income investment objectives, our friendly Investor Relations Team is available to discuss any queries on 1300 73 72 74.
Learn more about how to invest with Skyring:
The Power of Compound Interest
What is Compound Interest
Reinvesting with Skyring
Join the DRP when applying for the Fund or anytime later.
An Example: What Compounding Could Look Like Over Time
The Bottom Line
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