The Fund returned 0.55% over the month of March, delivered 1.88% for the previous three months, and 8.90% over the past 12 months. The Net Asset Value (NAV) of the Fund, as at 31 March 2015, was $57.44m 2 and the redemption price was 1.345685 3.

The Fund distributed 2.5 cents per unit for the quarter ended March 31.  In the previous two quarters, the distributions had been 2.5 cents (Dec Qtr) and 2.0 cents (Sept Qtr) per unit, making a combined distribution for the financial year to date of 7.0 cents per unit.  The Fund is a tax exempt entity which must distribute all taxable income it generates during the year to its unit holders.  The final distribution in June is always the balancing item and has tended to be slightly higher than the previous 3 distributions. We expect this to be the case for the June 2015 distribution.

Notwithstanding the RBA decision not to follow their February 25bps interest rate cut in March, we believe a further reduction is forthcoming. While another interest rate cut will reduce the Fund’s running yield, owing to a lower reference rate (BBSW), the corollary is likely to be a broad based ‘hunt’ for yield, with the exiting of term deposits into risky assets. The Fund is likely to be beneficiary of this rotation with the trading margin on its securities likely to compress, leading to a higher price.

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