Australian Unity Investments (AUI) has further improved redemption opportunities for its Mortgage Income Trust (MIT) with a regular monthly facility allowing investors to withdraw up to one percent of their total investment in the Fund each month.
It is the first time that the Trust has had a regular redemption facility since the introduction of the Government’s bank guarantee in October last year which resulted in almost all mortgage funds temporarily putting redemptions on hold. AUI has not stopped making regular monthly distributions to investors and its ‘severe financial hardship’ arrangements will continue.
The MIT’s monthly redemption facility will start on 1 June and withdrawals will start at one percent of units held or a minimum of $1,000 per month.
Mr Roy Prasad, AUI’s head of mortgages, said the introduction of the bank guarantee caused mortgage fund managers to change their redemption policies to preserve liquidity on behalf of investors in these funds.
“Since December 2008, AUI has had two redemption offers for investors in the Trust, but at the same time has been working towards a better approach for all its investors, resulting in this regular monthly redemption facility.
“The liquidity levels in the Fund have continued to stabilise, allowing us to introduce this capped monthly redemption policy. We believe it strikes a balance between giving our investors improved access to their capital while at the same time allowing us to continue managing the Fund appropriately for all investors in circumstances made difficult by the bank guarantee.
“The new policy is intended to provide investors with greater certainty about their investment and their ability to access capital, aligning redemptions with the aim of the Fund which is to provide investors with regular monthly income payments.
“Investors that need to access their capital can now plan on a regular monthly redemption if required, in addition to their current income return from the Trust which has returned over six percent over the last 12 months (as at 30 April 2009).
“We will continue to monitor and manage the Fund’s liquidity, and expect that over time we will be able to increase the amount available for withdrawals,” Mr Prasad said.
He said that mortgage funds continue to be a very attractive option for investors compared to other fixed income alternatives, particularly in view of low interest rates.
“We strongly believe that quality and conservatively managed income funds, such as AUI’s, will continue to fill an increasing need for regular income as more Australians retire,” Mr Prasad said.
The new redemption approach does not apply to AUI’s High Yield Mortgage Trust which will continue to offer quarterly redemption windows until such time that liquidity allows a further easing.
For more information please contact:
Mr Roy Prasad
Email: rprasad@australianunity.com.au