Buy/Sell Spread
Buy and sell spreads are designed to help ensure investors shares equally in the transaction costs that are incurred by the Fund during the normal course of its operations.
The spreads are expressed as a percentage and are incorporated into declared entry and exit prices.
Importantly, the buy and sell spreads are not an additional fee. Rather, they are retained in the Fund to cover transaction costs incurred when buying or selling assets. These costs include real estate agent fees, brokerage, legal fees, stamp duty and taxes.
Please note, buy and sell spreads are not applied to the reinvestment of distributions.
Capitalisation Rate
A capitalisation rate is a property’s assumed rental yield and is often used when valuing a property. It calculates the value of the property based on its estimated future income and risk profile. Lower capitalisation rates are an indication that the property is considered less risky and more likely to be considered attractive by investors, which contributes to a higher value for the property.
First Registered Mortgages
Loans secured over real estate and having priority over any later mortgages or charges.
Fixed Interest Market
The market where Fixed Interest securities with a maturity date over one year are traded. They include Commonwealth Government bonds, corporate bonds, floating rate notes, and certificates of deposit.
Fixed Interest Securities
These represent loans to borrowers, such as governments, banks and companies. In return for the loan, borrowers generally pay a pre-determined rate of interest for an agreed term.
Gearing
Borrowing to invest. Gearing magnifies capital gains and income, but can have the effect of magnifying losses and reducing income.
Market Index
A measure which tracks changes in the value of a specific group of stocks, bonds, or other investments.
Microcap Stocks
Companies falling outside the top 250 companies, that is, smaller companies on the Australian Securities Exchange (ASX) ranked by market capitalisation.