The investment strategy once “shunned” for being too conservative is now reaping rewards, according to Aurora Funds Management director Hugh Latimer.
Latimer said when the group first launched its Dividend Income Trust in 2005, “many people shunned the offer, as it has an ‘income’ focus and was seen to be too conservative”.
Three years later, investors in this fund are having the last laugh, with the trust paying investor distributions at a yield of 10.11 per cent for the 2007-08 financial year.
Latimer said the current investment climate is favouring “carefully constructed, defensive” investment strategies.
As such, Aurora is continuing its conservative strategy, reporting that as a result of the ongoing market volatility, “a number of the Aurora Trusts have reduced or eliminated the level of gearing from their respective underlying investment strategies”.
Latimer said the expected level of distributions from the underlying investments for the remainder of the year are lower than the previous quarter, and are therefore “insufficient to justify the cost and risk of gearing the underlying securities”.
