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Aurora Dividend Income Trust (Managed Fund) (AOD)
is a publicly listed company on the Australian Securities Exchange (ASX).
About Aurora Funds Management
Aurora Funds Management is a boutique funds manager specialising in managing funds that invest in Australian and global listed securities and derivatives, in a tax efficient manner. At Aurora, they pride themselves on being able to bring you investment strategies that produce high income from leading Australian and global wholesale investment managers. Aurora's investment products aim to achieve higher returns than the more traditional investment products available using derivatives to increase income and minimise capital risk.
Aurora's investment philosophy is to offer you independently researched investment ideas & products that are well managed and provide excellent portfolio diversification. The four current executive directors, each have considerable experience in funds management, stockbroking and derivatives.
About Aurora Dividend Income Trust
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.
The Investment Strategy is to invest in a portfolio of companies listed on the Australian Securities Exchange (ASX) the Investment Manager expects will pay fully franked dividends while employing a risk management overlay to limit the exposure to Australian equities to around 50% of the net assets of the Trust.
The investments will be actively managed and selected at the discretion of the Investment Manager from securities issued by or over companies within the S&P/ASX 200 Index. Part of this selection process aims to take advantage of changes the Investment Manager expects in the market prices of shares around the announcement of their half yearly and yearly dividend and earnings results. To capture these opportunities, the Trust will at times (though not always) invest in shares prior to their dividend and earnings result announcement, hold the shares long enough to earn the dividend and franking credits then liquidate the holding to free up the capital to make another investment.
In implementing the Investment Strategy, the Investment Manager may short securities and use derivatives. The purpose of shorting securities is to reduce the market exposure of the Trust and hence reduce the risk of loss from adverse market movements. Derivatives are typically used to improve the efficiency of implementing the Investment Strategy. The Investment Manager may not use derivatives or borrowings to gear the portfolio, and may not short securities with a total value of more than 60% of the Net Asset Value of the Trust.
The objective of the Trust is to:
- invest in Australian listed companies paying fully franked dividends;
- make cash distributions of at least 1.5% of the Net Asset Value of the Trust each quarter;
- distribute franking credits in excess of an equivalent investment in the S&P/ASX 200 Index each year;
- hedge 50% of the market exposure;
- outperform the S&P/ASX200 Accumulation Index over rolling five year periods (after fees) with less volatility.
The objective is not intended to be a forecast, and is only an indication of what the investment strategy aims to achieve over the medium to long term. Please note that while we aim to achieve the objective, the objective and returns are not guaranteed.
Aurora Dividend Income Trust (Managed Fund)
1 Alfred Street
+61 2 9080 2377
Fax: +61 2 9080 2378
The General Overview, Services, Products and Projects information for this profile was last edited on 04 Aug 2016.