The Aurora Property Buy-Write Income Trust, which has been invested in cash since October 2008, posted another small gain of +0.41% in March. The manager announced the Fund recommenced investing in property securities in April.
The Fund, which sells call options over a portfolio of Australian REITs (or AREITs), is expected to be fully invested by the end of April. Due to the recent economic turmoil the AREIT sector, which traditionally has been considered to be defensive, took on some non-defensive characteristics which affected returns. Sharp decreases in interest rates and the falling Australian dollar also affected the sector. The manager however believes that AREITs remain attractive due to low interest rates and low amount of leverage in the property sector (due to the security of the lease), although the depth and severity of the current downturn is yet to be seen.
