The Aurora Dividend Income Trust (ASX Code: AOD) seeks to outperform the S&P/ASX200 Accumulation Index over rolling five year periods with less volatility. Please note that while we aim to achieve this objective, the returns are not guaranteed. The Investment Strategy is predominantly to invest in a portfolio of fully franked dividend paying companies listed on the ASX while employing a risk management overlay to limit the exposure to Australian equities to around 50% of the net assets of the Trust. The Trust aims to make cash distributions of at least 1.5% per quarter and distribute franking credits in excess of an equivalent investment in the S&P/ASX 200 each year.
The core strategy is based on idea that fully franked dividend paying companies should outperform non-fully franked paying companies. Based on this, Aurora believes that superior risk adjusted returns can be achieved by investing in fully franked dividend paying companies while hedging market exposure by short selling non-fully franked dividend paying companies.
We also believe that whether a company distributes franking credits or not provides a very valuable fundamental filter. Independent studies have shown that the amount of tax paid is a reliable sign of a company’s sustainability and quality of earnings. In addition, companies that distribute franking credits also tend to be ‘value’ companies which should outperform ‘growth’ companies over time. Thus, franking which is a filter unique to Australia produces a portfolio generally consisting of high quality value stocks.
How to Invest
1. Read the PDS
2. Purchase Units on the ASX through a stockbroking firm under the ASX Code: AOD. We do not charge entry or exit fees when investors purchase or redeem their holdings on market, however transaction /brokerage costs may apply. Alternatively investors can complete the Application Form in the PDS. No brokerage costs will apply, however the Trust charges a Buy/Sell spread which is currently 0.1%.
3. Receive confirmation of your investment via post.