|
Gearing has the
effect of magnifying capital gains and income, but
under adverse market conditions has the effect of
magnifying losses and reducing income.
The Fund aims to cover the cost of borrowings from
the income earned from the additional investment.
Through this process, the Fund aims to enhance the
level of return.
The level of borrowings will generally range between
40-50% of the Fund’s gross assets.
Who is
the investment manager?
Australian Unity Property Limited manages the Fund.
What does the Fund invest in?
The Fund combines both investor contributions and borrowed money
to primarily acquire units in the Australian Unity Property Income Fund
(Underlying Fund).
The Australian Unity Property Income Fund generally invests in the
following types of property investments:
|
■ |
Direct property real estate |
|
■ |
Unlisted property trusts – these are unit trusts that predominantly
invest in direct property and are not listed on a stock exchange |
|
■ |
Listed property securities – these are trusts listed on an Australian
stock exchange that invest mainly in direct property and related activities. |
The properties held directly or through unlisted or listed property
securities include (but are not limited to) the following property sectors:
|
■ |
Commercial (e.g. office buildings) |
|
■ |
Retail (e.g. shopping centres) |
|
■ |
Industrial (e.g. warehouses) |
|
■ |
Healthcare (e.g. hospitals or medical centres) |
The Underlying Fund’s property portfolio is diversified by geographic
location and sector to help reduce risk.
Typically the Underlying Fund invests 40-70% of its assets in direct
property and unlisted property investment vehicles, 20-50% in
listed property securities, with the balance held in cash and similar
investments.
|
Australian Unity Geared Property Income Fund – Retail Units |
|
APIR Code |
YOC0002AU |
|
Inception date |
April 2005 |
|
Minimum Initial Investment |
$1,000 |
|
Minimum Additional Investment |
$500 |
|
Minimum Regular Saving Plan |
$100
per month |
|
Entry/Contribution Fee |
4.10% |
|
Minimum Withdrawal Amount |
$1,000 |
|
Exit/Withdrawal Fee |
Nil |
|
Management Costs |
1.95%
pa |
|
Buy/Sell Spread |
Buy:
2.20% Sell: Nil |
|
Income Distributions |
Quarterly |
What is the
Fund’s investment process?
Gearing level
The Fund will use
gearing to increase exposure to the underlying assets of the
Fund. Gearing allows the fund to increase it’s exposure to
the underlying assets. This increased exposure results in
greater returns in rising markets. Conversely in contracting
markets losses can be larger as a result of gearing.
The gearing level may change from time to time but will
generally range between 40% and 50% of the funds total
assets. The level of gearing is monitored regularly.
How does the gearing work?
The level of gearing is measured as the ratio of total
debt to total gross assets of the Fund. For example, based
on the Fund’s current target borrowing rate, if borrowings
are $500 and gross assets (which include borrowings) are
worth $1,000, the gearing ratio is 50%. At this ratio, for
every $1 that has been invested in the Fund, the Fund has
borrowed another $1 to purchase underlying assets.
Investors will not be required to deposit additional funds
to meet borrowing costs, nor sell assets to repay borrowings
or pay interest.
All obligations in this regard will be met out of the Fund.
For more information on borrowing costs see ‘Borrowing’
below.
Borrowing
The Fund borrows at competitive rates from Australian
and/or foreign financial institutions. Interest and
associated borrowing costs are payable from the Fund.
The lender(s) have priority over the Fund’s assets for
interest and principal repayments, in accordance with the
lending arrangements in place. To minimise the risk to
investors, lenders do not have additional recourse to
investors if the Fund defaults on its loan facilities.
Under the Fund’s Constitution and law, it has the ability
to:
|
■ |
borrow and
raise money for the purposes of the Fund and
to grant security over the assets; and |
|
■ |
incur all
types of obligations and liabilities |
Volatility of returns
Gearing can magnify both gains and losses from the
Fund’s investments, and investors may face increased
volatility of returns from their investment. In extreme
conditions, such as a dramatic, rapid market fall, you may
lose all your capital.
Australian Unity recommends that you seek professional financial advice
about the impact of gearing on your portfolio and whether it
suits your needs.
Investment process for the underlying fund
The investment manager for Australian Unity’s Property
Income Fund uses a top down thematic view to assess the
various property markets in which the Fund operates. A
bottom up view is used to identify undervalued property
across various property sectors, investment structures and
geography. Using this analysis, and separate yield analysis,
a preferred allocation between direct property, unlisted and
listed property securities is obtained.
The investment manager will use this information in
assessing and investing in direct property assets and
unlisted property securities.
The appointed listed property trust managers undertake their
own analysis in creating and managing their investment
portfolios.
Derivatives
It is not the investment manager’s current policy to use
derivatives for speculative activities for the Fund. The
investment manager may use derivatives for hedging purposes,
to manage the interest payable on the Fund’s borrowings and
for implementing portfolio positions.
More information
The Fund’s
performance and unit prices are available to view at:
www.australianunityinvestments.com.au/gpif
Important information
This investment product is issued by Australian Unity
Property Limited ABN 58 079 538 499, AFS Licence No 234455.
This information is intended only to provide a broad summary
of this financial product. Investment decisions should not
be made upon the basis of its past performance or
distribution rate, since future returns will vary. You
should refer to the current Product Disclosure if you wish
to know more about this product. The information provided
here was current at the time of publication only. |
