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| The Investment Strategy |
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An innovative Australian fund that targets a high income return over a three to five year
investment horizon.
The investment strategy seeks to capture returns from investing in some of Australia's leading
ASX listed property securities, with the objective of increasing the income generated by
implementing an active call option selling ('writing') strategy. A portion of the additional income may be used to purchase put options for protection.
The Investment Adviser will use detailed quantitative and qualitative analysis to identify property securities within the Australian property
sector (the 'Investment Universe') that can be expected to:
- provide a higher than average dividend yield over the medium term (including the influence of franking credits, and
special dividends and other financial restructuring); and
- provide the scope for additional income generation by the Trust systematically writing over the counter call options on these securities.
The portfolio, which will target to hold 10 - 20 securities directly at any one time, will be refined every three months or more regularly if the Investment Adviser recommends.
The weighting of each security will be subjectto the Investment Adviser's discretion, but generally no single investment will account for more than 20% of the portfolio.
Around 80% of the securities held will be selected from listed A-REIT securities that represent diversified exposure to the Australian listed property market.
These securities will be subject to the option overlay strategy of selling call options and buying put options.The remaining securities ( up to 20%) may be drawn from other listed property related securities and will not be subject to the option overlay strategy.
The Investment Adviser will advise on the preferred gearing level to increase the portfolio's exposure to the investment
strategy. The Loan to Value Ratio (LVR) of the Trust will be vary between o% and 50% , subject to market conditions, borrowing availablity , and borrowing cost.
At an LVR of 50%, for every $1.00 invested into the Trust, the Trust
borrows a further $1.00. Borrowing magnifies returns (both positive and negative) in the value of an investment relative to
a comparable ungeared investment. Please see page 11 of the PDS for a further summary of the risks of using borrowing.
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Australian listed property security sector - the "Investment Universe"
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