UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21206
AEW Real Estate Income Fund
(Exact name of registrant as specified in charter)
399 Boylston Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
John E. Pelletier, Esq.
CDC IXIS Asset Management Services, Inc.
399 Boylston Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 449-2801
Date of fiscal year end: January 31, 2004
Date of reporting period: July 31, 2003
Item 1. Reports to Stockholders.
The Registrant's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
[LOGO] AEW
AEW Real Estate Income Fund
Semiannual Report
July 31, 2003
AEW Management and Advisors
--------------------------------------------------------------------------------
AEW Real Estate Income Fund
--------------------------------------------------------------------------------
Portfolio Profile
--------------------------------------------------------------------------------
Objective:
High current income is a primary objective; capital appreciation is a secondary
objective
--------------------------------------------------------------------------------
Strategy:
Invests primarily in income-producing securities issued by real estate
companies, including REITs
--------------------------------------------------------------------------------
Inception Date:
November 26, 2002
--------------------------------------------------------------------------------
Portfolio Manager:
Matthew A. Troxell, CFA
AEW Management and Advisors, L.P.
--------------------------------------------------------------------------------
Common shares
American Stock Exchange Symbol: RIF
--------------------------------------------------------------------------------
CUSIP Numbers
Common shares: 00104H107
Preferred shares: 00104H206
--------------------------------------------------------------------------------
July 31, 2003
Market Value
Per Common Share: $16.08
Net Asset Value Per Common Share: $17.29
Management Discussion
--------------------------------------------------------------------------------
Optimism seemed to return to the financial markets in March of 2003, after
almost three years of economic uncertainty and generally declining stock prices.
Shares of real estate investment trusts (REITs) have been one of the few bright
spots in the investment horizon during the past few years, but instead of fading
when the stock market as a whole revived, REITs continued to perform well during
the spring rally.
Performance facts
This is AEW Real Estate Income Fund's first semiannual report, covering the six
months ended July 31, 2003. Total return based on the market price of common
shares was 15.69% for the period. The market price per common share of the fund
rose to $16.08 on July 31, 2003, up from $14.55 on January 31, 2003. Changes in
the market price of fund shares reflect investor demand and are not tied to the
fund's net asset value.
The fund's total return for the period based on the net asset value of common
shares and the reinvestment of $0.69 in dividends was 29.01%. For the same
period, the total return on the Morgan Stanley REIT Index was 23.27%. Reflecting
changes in the value of assets in the portfolio and the distributions to
shareholders, the net asset value of the fund's common shares rose to $17.29
from $14.03 during the period. As of the end of July 2003, the fund had
approximately 3.8 million common shares outstanding and net assets of
approximately $66.3 million.
Market review
Investors in the capital markets today seem more willing to look ahead than they
were in the "show me" markets of the past few years. While there are few
indications of real strength in the economy currently, the recent strength in
the financial markets suggests that more investors are either anticipating
better times or at least are encouraged by a potential end to the downtrend.
Whatever the case, the major property sectors have posted positive results for
the six months ended July 31, 2003, even though there has been no real
improvement in real estate fundamentals.
In general, the fund's solid overall performance during the period reflected
continued investor interest in yield-oriented products, particularly those
focused on real estate. Capital has been flowing into the REIT market, attracted
by relatively high dividend yields, diversification benefits, low volatility,
and some degree of inflation protection.
Holdings update
The most meaningful adjustment we made to the portfolio during the period was to
issue "auction market preferred shares" in February. Subsequently, we executed a
series of interest rate swaps - specialized negotiations that allowed us to
greatly reduce our portfolio's exposure to changing interest rates. We also
increased the fund's position in the office sector by adding to companies with
exposure to Southern California, which we believe have more favorable
characteristics than office markets in other parts of the country. In addition
the fund's exposure to retail REITs declined slightly, primarily because we were
taking profits on securities that had appreciated in value.
During the six months ended July 31, 2003, we improved the stability of the
fund's cash flow by adding several new preferred stock positions. These
additions were in several property sectors and modestly increased our preferred
holdings to 25% of investments.
Consistent with its stated investment strategy, the fund is invested in a
combination of common and preferred equities issued by public real estate
companies. These holdings represent interests in a variety of property types and
geographic regions. The fund's common REIT shares performed slightly better than
preferred shares owned by the fund during the period.
1
--------------------------------------------------------------------------------
AEW Real Estate Income Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Outlook
We believe the economy should gain some strength during the remainder of 2003,
although the recovery should be gradual. We also think jobs will remain scarce
until some time next year. However, equity markets have rebounded over the past
several months, and the long period of sliding equity prices and declining bond
yields that drove so many investors into real estate seems to be lifting. We
believe the low cost of debt will do much to support real estate, even as other
asset classes begin to look attractive again. Moreover, investors with a new
appreciation for the diversification benefits and income potential of real
estate seem likely to continue to invest in the sector.
Property market fundamentals are more challenging. In our view, a dearth of new
jobs may delay a pronounced rebound in real estate demand until well into 2004,
and it may be years before some markets attain the peak employment levels
reached prior to the recession. We expect most property markets to be fairly
soft through at least 2004.
In our view, the REIT market is relatively fairly valued today, so we do not
expect REITs to continue to outperform other equities as much as they have
recently. In the near term, we believe REITs will deliver strong current yield,
and the property markets should gain in strength along with the economic
recovery over the next several years.
Investment Results through July 31, 2003
--------------------------------------------------------------------------------
Performance in Perspective
The chart comparing the fund's performance to a REIT index provides a general
sense of how the fund performed for the period from the fund's inception through
July 31, 2003. It may be helpful to understand the differences between the two.
The fund's total returns for the periods shown below include fund expenses, such
as management fees/1/. An index measures the performance of a theoretical
portfolio. Unlike a fund, the index is unmanaged and does not have expenses that
affect investment results. It is not possible to invest directly in an index.
Few investors could purchase all of the securities necessary to match the index
and would incur transaction costs and other expenses even if they could. AEW
Real Estate Income Fund is a leveraged fund that invests in common and preferred
shares of REITs, which makes a REIT index composed of purely common shares less
than a direct comparison.
Total Returns -- July 31, 2003
--------------------------------------------------------------------------------
Since
Inception/1/
6 Months/1/ (11/26/02)
----------- ------------
Total return on market value 15.69% 13.14%
Total return on net asset value 29.01 27.34
--------------------------------------------------------------------------------
Comparative Performance
Morgan Stanley REIT Index/2/ 23.27 20.88/3/
--------------------------------------------------------------------------------
Portfolio as of July 31, 2003
--------------------------------------------------------------------------------
Largest REIT Sectors % of Investments
--------------------------------------------------------------------------------
Office 22.0
--------------------------------------------------------------------------------
Shopping Centers 15.3
--------------------------------------------------------------------------------
Apartments 13.6
--------------------------------------------------------------------------------
Diversified 10.1
--------------------------------------------------------------------------------
Healthcare 10.0
--------------------------------------------------------------------------------
Office/Industrial 7.8
--------------------------------------------------------------------------------
Regional Malls 7.4
--------------------------------------------------------------------------------
Lodging/Resorts 7.3
--------------------------------------------------------------------------------
Industrial 2.2
--------------------------------------------------------------------------------
Factory Outlets 1.3
--------------------------------------------------------------------------------
Ten Largest Holdings* % of Investments
--------------------------------------------------------------------------------
Healthcare Realty Trust, Inc. 4.3
--------------------------------------------------------------------------------
Prentiss Properties Trust 3.7
--------------------------------------------------------------------------------
Heritage Property Investment Trust 3.3
--------------------------------------------------------------------------------
iStar Financial, Inc. 3.3
--------------------------------------------------------------------------------
Mack-Cali Realty Corp. 3.0
--------------------------------------------------------------------------------
Urstadt Biddle Properties, Inc., Preferred 2.9
--------------------------------------------------------------------------------
Senior Housing Properties Trust 2.8
--------------------------------------------------------------------------------
Kilroy Realty Corp. 2.8
--------------------------------------------------------------------------------
New Plan Excel Realty Trust 2.8
--------------------------------------------------------------------------------
Gables Residential Trust 2.7
--------------------------------------------------------------------------------
*Common Shares except as noted
Notes to Chart
All returns represent past performance and do not guarantee future results.
Share price and return will vary and you may have a gain or loss when you sell
your shares. Recent returns may be higher or lower than those shown. All results
include reinvestment of dividends and capital gains. The table represents past
performance of the fund's common shares and does not reflect taxes shareholders
might owe on any fund distributions or when they sell their shares. Periods less
than one year are not annualized.
/1/ Fund performance has been increased by fee waivers, without which
performance would have been lower.
/2/ Morgan Stanley REIT Index is an unmanaged index of stocks issued by real
estate investment trusts (REITs). It is not possible to invest directly in
the index.
/3/ The since-inception index comparison is calculated from 11/30/02.
--------------------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
AEW Real Estate Income Fund -- Schedule of Investments
--------------------------------------------------------------------------------
Investments as of July 31, 2003 (Unaudited)
Shares Description Value (a)
--------------------------------------------------------------------------------
Common Stocks -- 104.3% of Total Net Assets
REAL ESTATE INVESTMENT TRUSTS - 104.3%
REITs - Apartments - 15.9%
44,000 Apartment Investment & Management Co.................... $ 1,734,040
52,000 Archstone Smith Trust .................................. 1,344,200
65,000 Camden Property Trust .................................. 2,425,150
78,500 Gables Residential Trust ............................... 2,492,375
40,000 Mid-America Apartment Communities, Inc.................. 1,144,000
66,500 Summit Properties, Inc.................................. 1,406,475
-----------
10,546,240
-----------
REITs - Diversified - 10.2%
90,000 Crescent Real Estate Equities Co........................ 1,513,800
84,000 iStar Financial, Inc.................................... 3,045,000
120,000 Lexington Corporate Properties Trust ................... 2,169,600
-----------
6,728,400
-----------
REITs - Factory Outlets - 2.1%
40,000 Tanger Factory Outlet Centers, Inc...................... 1,412,000
-----------
REITs - Healthcare - 13.6%
55,000 Health Care Property Investors, Inc..................... 2,410,650
121,000 Healthcare Realty Trust, Inc............................ 3,967,590
190,500 Senior Housing Properties Trust ........................ 2,638,425
-----------
9,016,665
-----------
REITs - Industrial - 1.0%
25,000 EastGroup Properties, Inc............................... 684,500
-----------
REITs - Lodging/Resorts - 3.0%
63,000 Hospitality Properties Trust ........................... 1,985,760
-----------
REITs - Manufactured Homes - 0.7%
15,000 Chateau Communities, Inc................................ 442,650
-----------
REITs - Office - 26.2%
80,000 Arden Realty, Inc....................................... 2,240,000
65,000 CarrAmerica Realty Corp................................. 1,898,650
77,000 Glenborough Realty Trust, Inc........................... 1,551,550
90,000 Highwoods Properties, Inc............................... 2,082,600
250,000 HRPT Properties Trust .................................. 2,322,500
76,000 Mack-Cali Realty Corp................................... 2,798,320
50,000 Maguire Properties, Inc. (c) ........................... 1,020,000
111,500 Prentiss Properties Trust .............................. 3,450,925
-----------
17,364,545
-----------
REITs - Office/Industrial - 8.7%
91,000 Kilroy Realty Corp...................................... 2,618,070
68,100 Liberty Property Trust ................................. 2,362,389
35,000 Reckson Associates Realty Corp.......................... 759,850
-----------
5,740,309
-----------
REITs - Regional Malls - 7.1%
150,000 Borealis Retail REIT ................................... 1,076,530
112,000 Glimcher Realty Trust .................................. 2,332,960
35,000 Macerich Co. (The) ..................................... 1,306,550
-----------
4,716,040
-----------
REITs - Shopping Centers - 13.8%
70,000 Commercial Net Lease Realty, Inc........................ 1,238,300
60,000 Equity One, Inc......................................... 1,020,000
108,000 Heritage Property Investment Trust ..................... 3,083,400
115,000 New Plan Excel Realty Trust ............................ 2,576,000
49,300 Ramco-Gershenson Properties Trust ...................... 1,211,794
-----------
9,129,494
-----------
REITs - Specialty - 2.0%
17,000 Correctional Properties Trust .......................... $ 434,520
30,000 Entertainment Properties Trust ......................... 924,000
-----------
1,358,520
-----------
Total Real Estate Investment Trusts .................... 69,125,123
-----------
Total Common Stocks (Identified Cost $59,225,438) ...... 69,125,123
-----------
Preferred Stocks - 35.2%
REAL ESTATE INVESTMENT TRUSTS - 35.2%
REITs - Apartments - 3.2%
50,000 Apartment Investment & Management Co., Series G ........ 1,341,000
29,400 Apartment Investment & Management Co., Series R ........ 786,450
-----------
2,127,450
-----------
REITs - Diversified - 4.1%
50,000 Colonial Properties Trust, Series D .................... 1,290,000
54,800 Crescent Real Estate Equities Co., Series B ........... 1,413,840
-----------
2,703,840
-----------
REITs - Healthcare - 0.4%
10,800 Health Care REIT, Inc., Series D (c) ................... 276,048
-----------
REITs - Industrial - 2.1%
52,000 Keystone Property Trust, Series D ...................... 1,370,200
-----------
REITs - Lodging/Resorts - 7.3%
75,000 Boykin Lodging Co., Series A ........................... 1,912,500
25,000 FelCor Lodging Trust, Inc., Series B ................... 569,750
75,000 Hospitality Properties Trust, Series B ................. 1,983,000
15,000 LaSalle Hotel Properties, Series A ..................... 401,250
-----------
4,866,500
-----------
REITs - Office - 4.8%
30,000 Highwoods Properties, Inc., Series B ................... 753,000
90,400 HRPT Properties Trust, Series B ........................ 2,404,640
-----------
3,157,640
-----------
REITs - Office/Industrial - 2.3%
30,000 Bedford Property Investors, Inc., Series A, 144A (c) ... 1,500,000
-----------
REITs - Regional Malls - 3.2%
35,500 Mills Corp. (The), Series B ............................ 929,390
25,000 Mills Corp. (The), Series E ............................ 648,750
23,000 Taubman Centers, Inc., Series A ........................ 577,300
-----------
2,155,440
-----------
REITs - Shopping Centers - 7.8%
42,200 Developers Diversified Realty Corp., Series F .......... 1,122,098
25,000 Developers Diversified Realty Corp., Series G .......... 633,750
13,000 Federal Realty Investment Trust, Series B .............. 347,620
12,500 Ramco-Gershenson Properties Trust, Series B ............ 348,125
27,000 Urstadt Biddle Properties, Inc., Series C (c) .......... 2,700,000
-----------
5,151,593
-----------
Total Real Estate Investment Trusts .................... 23,308,711
-----------
Total Preferred Stocks (Identified Cost $22,782,738) 23,308,711
-----------
See accompanying notes to financial statements.
3
--------------------------------------------------------------------------------
AEW Real Estate Income Fund -- Schedule of Investments (continued)
--------------------------------------------------------------------------------
Investments as of July 31, 2003 (unaudited)
Principal
Amount Description Value(a)
--------------------------------------------------------------------------------
Short Term Investment -- 1.0%
$669,194 Repurchase Agreement with Investors Bank & Trust Co.
dated 7/31/2003 at 0.70% to be repurchased at
$669,207 on 8/01/2003, collateralized by $699,661
Federal Home Loan Mortgage Bond, 3.08% due 2/15/2022
valued at $702,654 .................................. $ 669,194
------------
Total Short Term Investment
(Identified Cost $669,194) .......................... 669,194
------------
Total Investments -- 140.5%
(Identified Cost $82,677,370) (b) ................... 93,103,028
Other assets less liabilities -- 1.8% ............... 1,185,551
Auction Market Preferred Shares plus
cumulative unpaid dividends (42.3)% ................. (28,002,546)
------------
Total Net Assets--100%............................... $ 66,286,033
============
(a) See Note 2a of Notes to Financial Statements.
(b) Federal Tax Information:
At July 31, 2003, the net unrealized appreciation on
investments based on cost of $82,677,370 for federal
income tax purposes was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value over
tax cost ................................................. $ 11,842,991
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax cost over
value .................................................... (1,417,333)
------------
Net unrealized appreciation $ 10,425,658
============
(c) Non-income producing security.
144A Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registrations, normally to qualified
institutional buyers. At the period end, the value of these
amounted to $1,500,000 or 2.3% of net assets.
See accompanying notes to financial statements.
4
--------------------------------------------------------------------------------
Statement of Assets & Liabilities
--------------------------------------------------------------------------------
July 31, 2003 (unaudited)
ASSETS
Investments at cost ................................................ $82,677,370
Net unrealized appreciation ........................................ 10,425,658
-----------
Investments at value ............................................ 93,103,028
Receivable for securities sold ..................................... 1,717,582
Dividends and interest receivable .................................. 528,994
Receivable for open swap contracts ................................. 598,425
-----------
TOTAL ASSETS .................................................... 95,948,029
-----------
LIABILITIES
Payable for securities purchased ................................... 1,500,000
Management fees payable ............................................ 35,458
Transfer agent fees payable ........................................ 4,422
Accounting and administrative fees payable ......................... 6,063
Other accounts payable and accrued expenses ........................ 113,507
-----------
TOTAL LIABILITIES ............................................... 1,659,450
-----------
AUCTION PREFERRED SHARES 1,120 shares outstanding at liquidation value
plus cumulative unpaid dividends ................................... 28,002,546
-----------
NET ASSETS APPLICABLE TO COMMON SHARES ................................ $66,286,033
===========
NET ASSETS CONSIST OF:
Common Shares, $0.00001 par value; unlimited number of shares
authorized, 3,833,390 shares issued and outstanding ............. $ 38
Additional paid in capital ......................................... 54,134,731
Undistributed (overdistributed) net investment income............... (21,205)
Accumulated net realized gain (loss) on investments ................ 1,148,386
Net unrealized appreciation (depreciation) of investments .......... 11,024,083
-----------
NET ASSETS APPLICABLE TO COMMON SHARES ................................ $66,286,033
===========
COMPUTATION OF NET ASSET VALUE PER COMMON SHARE
Net assets ......................................................... $66,286,033
===========
Common Shares issued and outstanding ............................... 3,833,390
===========
Net asset value per share .......................................... $ 17.29
===========
Market Value (closing price per share on American Stock Exchange)... $ 16.08
===========
See accompanying notes to financial statements.
5
Statement of Operations
For the Six Months Ended July 31, 2003 (unaudited)
INVESTMENT INCOME
Dividends ..................................................... $ 3,442,921
Interest ...................................................... 144,180
-----------
3,587,101
-----------
Expenses
Management fees ............................................ 336,178
Trustees' fees and expenses ................................ 24,084
Accounting and administrative .............................. 74,265
Custodian .................................................. 19,778
Transfer agent fees ........................................ 21,632
Audit and tax services ..................................... 25,786
Legal ...................................................... 74,289
Reports to shareholders .................................... 9,981
Preferred stock auction .................................... 31,889
American Stock Exchange fees ............................... 7,204
Interest expense on interest rate swap contracts ........... 337,429
Miscellaneous .............................................. 15,321
-----------
Total expenses before reductions .............................. 977,836
Less waivers ............................................... (184,270)
-----------
Net expenses .................................................. 793,566
-----------
Net investment income ......................................... 2,793,535
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY TRANSACTIONS AND INTEREST RATE SWAPS
Realized gain on:
Investments - net .......................................... 1,154,837
Foreign currency transactions - net ........................ (6,078)
Change in unrealized appreciation (depreciation) of:
Investments - net .......................................... 11,375,984
Interest rate swap contracts - net ......................... 598,425
-----------
Net realized and unrealized gain (loss) on investments, foreign
currency transactions and interest rate swaps .............. 13,123,168
-----------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ............... 15,916,703
LESS DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM NET
INVESTMENT INCOME ................................................ (169,779)
-----------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
APPLICABLE TO COMMON SHARES ...................................... $15,746,924
===========
See accompanying notes to financial statements.
6
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
For the Six Months Ended For the Period
July 31, November 26, 2002*
2003 to
(unaudited) January 31, 2003
------------------------ ------------------
FROM OPERATIONS:
Net investment income ........................... $ 2,793,535 $ 322,911
Net realized gain (loss) on investments and
foreign currency transactions ................ 1,148,759 53,343
Net change in unrealized appreciation
(depreciation) of investments and
interest rate swap contracts ................. 11,974,409 (950,326)
----------- -----------
Increase (decrease) in net assets resulting
from operations .............................. 15,916,703 (574,072)
LESS DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ........................... (169,779) --
----------- -----------
Increase (decrease) in net assets from
operations applicable to common shares ....... 15,746,924 (574,072)
----------- -----------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ........................... (2,644,961) (328,168)
Short-Term capital gain ......................... -- (14,018)
Long-Term capital gain .......................... -- (39,698)
Return of capital ............................... -- (58,796)
----------- -----------
(2,644,961) (440,680)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS DERIVED FROM
COMMON SHARE TRANSACTIONS: ...................... 9,467 54,790,542
----------- -----------
Offering costs and preferred shares
underwriting commissions ..................... (601,187) --
----------- -----------
Total increase (decrease) in net assets ......... 12,510,243 53,775,790
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
Beginning of period ............................. 53,775,790 --
----------- -----------
End of period ................................... $66,286,033 $53,775,790
=========== ===========
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME ............................ $ (21,205) $ --
=========== ===========
*Commencement of operations.
See accompanying notes to financial statements.
7
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
For the Six Months Ended For the Period
July 31, November 26, 2002*
2003 to
(unaudited) January 31, 2003
------------------------ ------------------
Net Asset Value, Beginning of Period (Common Shares) .................. $ 14.03 $ 14.33 (a)
------- -------
Net Investment Income (b) ............................................. 0.73 0.09
Net Realized and Unrealized Gain (Loss) on Investments ................ 3.42 (0.24)
------- -------
Total From Investment Operations ...................................... 4.15 (0.15)
------- -------
Less Distributions to Preferred Shareholders:
Dividends From Net Investment Income ............................... (0.04) --
------- -------
Total From Investment Operations Applicable to Common Shareholders .... 4.11 (0.15)
------- -------
Less Distributions to Common Shareholders:
Dividends From Net Investment Income ............................... (0.69) (0.09)
Distributions From Net Realized Short Term Gains ................... -- (0.00)(f)
Distributions From Net Realized Long Term Gains .................... -- (0.01)
Distributions From Paid In Capital ................................. -- (0.02)
------- -------
Total Distributions ................................................... (0.69) (0.12)
------- -------
Common Shares Offering Costs Charged to Paid-In Capital ............... -- (0.03)
------- -------
Preferred Shares Underwriting Commissions and Offering Costs .......... (0.16) --
------- -------
Net Asset Value, End of Period (Common Shares) ........................ $ 17.29 $ 14.03
======= =======
Market Value, End of Period (Common Shares) ........................... $ 16.08 $ 14.55
======= =======
Total Return on Market Value (%) ...................................... 15.69 (2.23)(c)
Total Return on Net Asset Value (%) ................................... 29.01 (1.29)(c)
Ratio of Expenses to Average Net Assets Applicable to Common Shares,
Before Waivers (%) (d)(e) .......................................... 3.38 1.85
Ratio of Expenses to Average Net Assets Applicable to Common Shares,
After Waivers (%) (d)(e) ........................................... 2.75 1.37
Ratio of Net Investment Income to Average Net Assets Applicable to
Common Shares, Before Waivers (%) (e) .............................. 9.03 2.80
Ratio of Net Investment Income to Average Net Assets Applicable to
Common Shares, After Waivers (%) (e) ............................... 9.66 3.28
Portfolio Turnover Rate (%) ........................................... 16 1
Net Assets Applicable to Common Shares, End of Period (000) ........... $66,286 $53,776
Auction Market Preferred Shares
Total Shares Outstanding .............................................. 1,120 --
Asset Coverage Per Share (g) .......................................... $84,184 $ --
Involuntary Liquidation Preference Per Share (h) ...................... $25,000 $ --
Approximate Market Value Per Share.................................... $25,000 $ --
* Commencement of operations.
(a) Net asset value at beginning of period reflects the deduction of the sales
load of $0.675 per share paid by the shareholder from the $15.00 offering
price.
(b) Calculated using average common shares outstanding during the period.
(c) Total return on net asset value is calculated assuming a purchase at the
offering price of $15.00 less the sales load of $0.675 paid by the
shareholder on the first day and the ending net asset value per share.
Total return on market value is calculated assuming a purchase at the
offering price of $15.00 on the first day and a sale at the current market
price on the last day of the period. Total return on net asset value and
total return on market value are not computed on an annualized basis.
(d) The investment adviser and the Fund's administrator agreed to waive a
portion of their fees during the period. Without these waivers, expense
ratios would have been higher.
(e) Annualized.
(f) Amount rounds to less than $0.01 per share.
(g) Calculated by subtracting the Fund's total liabilities (not including the
preferred shares) from the Fund's total assets, and dividing this by the
number of preferred shares outstanding.
(h) Plus accumulated and unpaid dividends.
See accompanying notes to financial statements.
8
--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------
For the Six Months Ended July 31, 2003 (unaudited)
1. Organization. AEW Real Estate Income Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as a
non-diversified closed-end management investment company. The Fund is organized
under the laws of the Commonwealth of Massachusetts by an amended and restated
Agreement and Declaration of Trust dated October 12, 2002. The Fund's primary
investment objective is high current income; the Fund's secondary investment
objective is capital appreciation. The Fund seeks to achieve its objective by
concentrating its investments in the United States real estate industry.
2. Significant Accounting Policies. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements. The Fund's financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America
which require the use of management estimates that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
a. Security Valuation. Equity securities are valued on the basis of valuations
furnished to the Fund by a pricing service, which has been authorized by the
Trustees. The pricing service provides the last reported sale price for
securities listed on an applicable securities exchange or on the NASDAQ National
Market, or, if no sale was reported and in the case of over-the-counter
securities not so listed, the last reported bid price. Effective April 14, 2003,
securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price
("NOCP"), or if lacking an NOCP, at the most recent bid quotation on the NASDAQ.
Short-term obligations with a remaining maturity of less than sixty days are
stated at amortized cost, which approximates market value. All other securities
and assets are valued at their fair value as determined in good faith by the
Fund's investment adviser and officers, under the supervision of the Fund's
Trustees.
b. Security Transactions and Related Investment Income. Security transactions
are accounted for on trade date. Dividend income is recorded on ex-dividend date
and interest income is recorded on an accrual basis. Interest income is
increased by the accretion of discount and decreased by the amortization of
premium. In determining net gain or loss on securities sold, the cost of
securities has been determined on an identified cost basis.
c. Federal Income Taxes. The Fund intends to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies, and to
distribute to its shareholders substantially all of its net investment income
and any net realized capital gains at least annually. Accordingly, no provision
for federal income tax has been made.
d. Dividends and Distributions to Shareholders. The Fund intends to make regular
monthly cash distributions to common shareholders at a level rate based on the
projected performance of the Fund. Distributions to common shareholders are
recorded on the ex-dividend date. Distributions to preferred shareholders are
recorded daily and are payable at the end of each dividend period. Each dividend
period for Auction Market Preferred Shares ("AMPS") is generally seven days. For
the period ended July 31, 2003, the dividend rates for AMPS ranged from 1.08% to
1.35%. The dividend rate for AMPS on July 31, 2003 was 1.09%. In addition, at
least annually, the Fund intends to distribute net capital gains, if any. The
timing and characterization of certain income and capital gains distributions
are determined in accordance with federal tax regulations which may differ from
accounting principles generally accepted in the United States of America.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to the capital accounts. Distributions from net
investment income and short-term capital gains are considered to be ordinary
income for tax purposes.
e. Swap Agreements. The Fund may enter into swap agreements to manage its
exposure to the financial markets. A swap is an agreement to exchange the return
generated by one instrument for the return generated by another instrument. The
Fund may enter into interest rate, total return and forward swap spread lock
swap agreements to manage its exposure to interest rates. Interest rate swap
agreements involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal.
Swaps are marked to market daily based upon quotations from market makers and
the change in value, if any, is recorded as unrealized gain or loss in the
Statement of Operations. Payments received or made at the end of the measurement
period are recorded as realized gain or loss in the Statement of Operations. Net
payments of interest on interest rate swap contracts are included as part of
interest income or interest expense on interest rate swap contracts. These
financial instruments are not actively traded on financial markets. The values
assigned to these instruments are based upon the best available information and
because of the uncertainty of the valuation, these values may differ
significantly from the values that would have been realized had a ready market
for these instruments existed, and the differences could be material. Entering
into these agreements involves, to varying degrees, elements of credit, legal,
market and documentation risk in excess of the amounts recognized on the
Statement of Assets and Liabilities. Such risks involve the possibility that
there will be no liquid market for these agreements, that the counterparty to
the agreements may default on its obligation to perform or disagree as to the
meaning of contractual terms in the agreements, or that there may be unfavorable
changes in interest rates. See Note 7 for a summary of the open swap contracts
as of July 31, 2003.
3. Auction Market Preferred Shares. The Fund is authorized to issue an unlimited
number of preferred shares, par value $0.0001 per share. On February 10, 2003,
the Fund issued 1,120 shares of Series M AMPS with proceeds of $28,000,000 in a
public offering. Underwriting commissions and offering costs of $601,187 ($0.16
per common share) were incurred in connection with the offering and were charged
directly to paid-in-capital of the common shares. Dividends on the AMPS are
cumulative at a rate which was established at the offering of the AMPS and has
been reset every seven days thereafter by an auction. The Fund pays annual fees
equivalent to 0.25% of the preferred shares' liquidation value for the
remarketing efforts associated with the preferred auctions.
9
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
For the Six Months Ended July 31, 2003 (unaudited)
The AMPS are redeemable at the option of the Fund, at a redemption price equal
to $25,000 per share, plus accumulated and unpaid dividends, on any dividend
payment date. The AMPS may also be subject to mandatory redemption at a
redemption price equal to $25,000 per share, plus accumulated and unpaid
dividends, if the Fund defaults on its asset maintenance requirements with
respect to the AMPS and fails to cure such a default within the time permitted.
If the dividends on the AMPS shall remain unpaid in an amount equal to two full
years' dividends, the holders of the AMPS as a class have the right to elect a
majority of the Board of Trustees. In general, the holders of the AMPS and the
common shares have equal voting rights of one vote per share, except that the
holders of the AMPS, as a separate class, have the right to elect at least two
members of the Board of Trustees and to vote under certain other circumstances
specified in the Fund's By-Laws. The AMPS have a liquidation preference of
$25,000 per share. The Fund is required to maintain certain asset coverage with
respect to the AMPS as defined in the Fund's By-Laws.
4. Purchases and Sales of Securities. For the six months ended July 31, 2003,
purchases and sales of securities (excluding short-term investments) were
$40,845,259 and $12,442,548, respectively.
5. Management Fees and Other Transactions with Affiliates.
a. Management Fees. AEW Management and Advisors, L. P. ("AEW") serves as the
investment adviser to the Fund. AEW is an affiliate of AEW Capital Management,
L.P., a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P.
("CDC IXIS North America"). Under the terms of the management agreement, the
Fund pays a monthly management fee computed at the annual rate of 0.80% of the
average daily managed assets of the Fund (which include the liquidation
preference of any preferred shares and the principal amount of any borrowings
used for leverage).
AEW has contractually agreed to waive a portion of its management fees in the
amount of 0.25% of average daily managed assets during the first five years of
the Fund's operations, 0.20% of average daily managed assets in year six, 0.15%
of average daily managed assets in year seven, 0.10% of average daily managed
assets in year eight, and 0.05% of average daily managed assets in year nine.
The investment adviser has also agreed to waive an additional portion of its
management fees in the amount of 0.10% of average daily managed assets. This
waiver is voluntary and may be terminated by the investment adviser at any time
without notice.
For the six months ended July 31, 2003, management fee and waiver for the Fund
were as follows:
Percentage of Average
Gross Waiver of Net Daily Managed Assets*
Management Management Management ---------------------
Fee Fee Fee Gross Net
---------- ----------- ---------- ----- -----
$336,178 $147,078 $189,100 0.80% 0.45%
*Annualized
b. Accounting and Administrative Expense. CDC IXIS Asset Management Services,
Inc. ("CIS"), a wholly owned subsidiary of CDC IXIS North America, performs
certain accounting and administrative services for the Fund and has
subcontracted with Investors Bank & Trust Company ("IBT") to serve as
subadministrator. The Fund pays CIS a fee for these services based on the Fund's
average daily managed assets, or if higher, the minimum fee set forth below:
(1) Percentage of Eligible Average Daily Managed Assets
---------------------------------------------------
First Over
$300 million $300 million
------------ ------------
0.0600% 0.0575%
or
(2) An annual minimum fee of $150,000.
CIS has currently agreed to voluntarily waive a portion of its administrative
services fee. The waiver is voluntary and may be terminated by CIS at any time
without notice.
For the six months ended July 31, 2003, the following was paid to CIS for
accounting and administrative services:
Gross Waiver of Net Percentage of Average
Accounting Accounting Accounting Daily Managed Assets*
And And And ---------------------
Administrative Administrative Administrative Gross Net
-------------- -------------- -------------- ----- -----
$74,265 $37,192 $37,073 0.18% 0.09%
*Annualized
10
--------------------------------------------------------------------------------
Notes To Financial Statements (continued)
--------------------------------------------------------------------------------
For the Six Months Ended July 31, 2003 (unaudited)
c. Trustees Fees. The Fund does not pay any compensation directly to its
officers or Trustees who are directors, officers or employees of CDC IXIS North
America or its affiliates. Each other Trustee receives a retainer fee at the
annual rate of $2,000 and meeting attendance fees of $375 for each meeting of
the Board of Trustees attended. Each committee member receives an additional
retainer fee at the annual rate of $2,000 while each committee chairman receives
a retainer fee (beyond the $2,000 fee) at the annual rate of $1,000. The
retainer fees assume four board or committee meetings per year; Trustees are
compensated for each additional board and committee meeting, in excess of four
meetings per year, at the rate of $375 and $200, respectively.
6. Shares of Beneficial Interest. The Agreement and Declaration of Trust permits
the Fund's Trustees to issue an unlimited number of common shares, $0.00001 par
value per share. Transactions in common shares were as follows:
For the
Six Months Period
Ended November 26, 2002 (a)
July 31, to
2003 January 31, 2003
--------------- -----------------------
Shares Amount Shares Amount
------ ------ --------- -----------
Shares purchased
by investment adviser ........... -- $ -- 7,000 $ 100,275
Initial Public Offering on
November 26, 2002 (b)............ -- -- 3,750,000 53,606,250
Purchase of additional shares
by underwriters on
January 13, 2003 (c)............. -- -- 75,000 1,074,000
Shares issued pursuant to the
Fund's dividend reinvestment
plan ............................ 676 9,467 714 10,017
--- ------ --------- -----------
Net increase ....................... 676 9,467 3,832,714 54,790,542
--- ------ --------- -----------
Increase derived from capital
shares transactions ............. 676 $9,467 3,832,714 $54,790,542
=== ====== ========= ===========
(a) Commencement of operations
(b) After deduction of underwriting commissions and offering expenses of
$2,643,750.
(c) After deduction of underwriting commissions of $51,000.
7. Swap Contracts.
Unrealized
Notional Amount Expiration Date Description Appreciation/(Depreciation)
------------------- --------------- ---------------------------------------------------------- ---------------------------
Interest Rate Swaps
2,800,000 USD 3/1/2006 Agreement with Fleet National Bank dated 2/28/2003 to pay $ 7,129
the notional amount multiplied by 2.345% and to receive
the notional amount multiplied by the 1 week Floating Rate
London Interbank Offered Rate ("LIBOR") adjusted by a
specific spread.
14,000,000 USD 3/3/2008 Agreement with Fleet National Bank dated 2/28/2003 to pay 281,129
the notional amount multiplied by 3.104% and to receive
the notional amount multiplied by the 1 week Floating Rate
LIBOR adjusted by a specific spread.
8,400,000 USD 3/1/2010 Agreement with Fleet National Bank dated 2/28/2003 to pay 310,167
the notional amount multiplied by 3.622% and to receive
the notional amount multiplied by the 1 week Floating Rate
LIBOR adjusted by a specific spread.
--------
$598,425
========
8. Subsequent Event. On July 1, 2003, the Fund declared three monthly dividends
of $0.115 per common share for the months of July, August and September payable
on July 25, August 29 and September 26, respectively.
11
--------------------------------------------------------------------------------
Dividend reinvestment plan
--------------------------------------------------------------------------------
The Fund has a Dividend Reinvestment Plan (the "Plan") commonly referred to
as an "opt-out" plan. Each Common Shareholder will have all distributions of
dividends and capital gains automatically reinvested in additional Common Shares
by EquiServe Trust Company, N.A., as agent for shareholders pursuant to the Plan
(the "Plan Agent"), unless they elect to receive cash. The Plan Agent will
either (i) effect purchases of Common Shares under the Plan in the open market
or (ii) distribute newly issued Common Shares of the Fund. Shareholders who
elect not to participate in the Plan will receive all distributions in cash paid
by check mailed directly to the shareholder of record (or if the shares are held
in street or other nominee name, then to the nominee) by the Plan Agent, as
dividend disbursing agent. Shareholders whose Common Shares are held in the name
of a broker or nominee should contact the broker or nominee to determine whether
and how they may participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Fund declares a dividend or makes a capital gain distribution,
the Plan Agent will, as agent for the participants, either (i) receive the cash
payment and use it to buy Common Shares in the open market, on the American
Stock Exchange or elsewhere, for the participants' accounts or (ii) distribute
newly issued Common Shares of the Fund on behalf of the participants. The Plan
Agent will receive cash from the Fund with which to buy Common Shares in the
open market if, on the determination date, the net asset value per share exceeds
the market price per share plus estimated brokerage commissions on that date.
The Plan Agent will receive the dividend or distribution in newly issued Common
Shares of the Fund if, on the determination date, the market price per share
plus estimated brokerage commissions equals or exceeds the net asset value per
share of the Fund on that date. The number of shares to be issued will be
computed at a per share rate equal to the greater of (i) the net asset value or
(ii) 95% of the closing market price per share on the payment date.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent. Such withdrawal will be effective immediately if received not
less than ten days prior to a distribution record date; otherwise, it will be
effective for all subsequent dividend record dates. When a participant withdraws
from the Plan or upon termination of the Plan as provided below, certificates
for whole Common Shares credited to his or her account under the Plan will be
issued and a cash payment will be made for any fraction of a Common Share
credited to such account. In the alternative, upon receipt of the participant's
instructions, Common Shares will be sold and the proceeds sent to the
participant less brokerage commissions and any applicable taxes.
The Plan Agent maintains each shareholder's account in the Plan and
furnishes confirmations of all acquisitions made for the participant. Common
Shares in the account of each Plan participant will be held by the Plan Agent on
behalf of the participant. Proxy material relating to shareholders' meetings of
the Fund will include those shares purchased as well as shares held pursuant to
the Plan.
In the case of shareholders, such as banks, brokers or nominees, which hold
Common Shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of Common Shares certified from
time to time by the record shareholders as representing the total amount
registered in the record shareholder's name and held for the account of
beneficial owners who are participants in the Plan.
The Plan Agent's fees for the handling of reinvestment of dividends and
other distributions will be paid by the Fund. Each participant will pay a pro
rata share of brokerage commissions incurred with respect to the Plan Agent's
open market purchases in connection with the reinvestment of distributions.
There are no other charges to participants for reinvesting dividends or capital
gain distributions; however, the Fund reserves the right to amend the Plan to
include a service charge payable by the participants.
The automatic reinvestment of dividends and other distributions will not
relieve participants of any income tax that may be payable or required to be
withheld on such dividends or distributions.
The Fund and the Plan Agent reserve the right to amend or terminate the
Plan. All correspondence concerning the Plan should be directed to the Plan
Agent by telephone at (800) 730-6001.
12
--------------------------------------------------------------------------------
Additional Information
--------------------------------------------------------------------------------
It is currently anticipated that the Fund's 2004 annual meeting of
Shareholders will be held in May 2004. Shareholders submitting any
proposals for the Fund intended to be presented at the 2004 annual meeting
must ensure that such proposals are received by the Fund, in good order and
in compliance with all applicable legal requirements and the requirements
of the Fund's Bylaws, no later than February 15, 2004 and not earlier than
January 31, 2004. If a Shareholder who wishes to present a proposal fails
to notify the Fund within these dates, the proxies solicited for the
meeting will have discretionary authority to vote on the Shareholder's
proposal if it is properly brought before the meeting. The submission by a
Shareholder of a proposal for inclusion in the proxy materials does not
guarantee that it will be included. Shareholder proposals are subject to
certain requirements under the federal securities laws and must be
submitted in accordance with the Fund's Bylaws. Shareholder proposals
should be addressed to the attention of the Secretary of the Fund.
In accordance with Section 23(c) of the Investment Company Act of 1940, as
amended, the Fund hereby gives notice that it may, from time to time,
repurchase its shares in the open market at the option of the Board of
Trustees and on such terms as the Board of Trustees shall determine.
Shareholder Meeting (Unaudited). At the annual meeting (the "Meeting") of
shareholders held on May 15, 2003, shareholders of the AEW Real Estate
Income Fund voted for the following proposal:
1. ELECTION OF TRUSTEES
For Against Abstained* Total Votes
--------- ------- ---------- -----------
(01) Graham T. Allison 1,852,684 11,445 0 1,864,129
(02) Richard Darman 1,850,992 13,137 0 1,864,129
(03) Pendleton P. White 1,850,992 13,137 0 1,864,129
*Includes Broker Non-Votes (if any).
Messrs. Daniel M. Cain, Kenneth J. Cowan, John A. Shane, John T. Hailer and
Peter S. Voss and Ms. Sandra O. Moose, Trustees of the Fund, each have
terms of office as Trustee that continued after the Meeting. Messrs. Edward
A. Benjamin, Paul G. Chenault and Robert J. Blanding became Trustees of the
Fund in June 2003.
13
--------------------------------------------------------------------------------
Privacy Policy
--------------------------------------------------------------------------------
CDC IXIS Asset Management Services, Inc.
AEW Real Estate Income Fund
Notice of Privacy Policies and Practices
We/1/ consider shareholder relationships to be the hallmark of our business and
are dedicated to protecting the confidentiality of any nonpublic personal
information provided by our customers/2/. We understand the trust that our
customers place in us and are committed to earning that trust well into the
future.
Types of Information Gathered
We collect personal information on applications, forms, documents, transaction
histories and correspondence (electronic, written and telephonic) with
customers. Through our Web sites we gather information about visitors and their
needs submitted through answers to surveys, data input to calculators and
information entered onto forms. This information includes but is not limited to
name, postal address, e-mail address and social security number. Much of the
data collected is statistical in nature and is not generally attributable to any
specific customer.
How we Use the Information
We use the information gathered to service your account and to provide you with
additional information about products and services. We do not disclose any
nonpublic information about current or former customers to any unaffiliated
third party except as permitted by law, or at the specific request of the
customer. The information we collect, as described above, may be shared with our
corporate affiliates in the financial services industry in order to enhance and
improve customer communications, services, and products designed to meet our
customers' needs. We may disclose some or all of the above information to
affiliated and unaffiliated companies that perform marketing and other services
(such as preparing and mailing prospectuses, reports and account statements,
conducting research on client satisfaction, and gathering votes for shareholder
proxies) on our or the Funds' behalf or to other financial institutions with
whom we have joint marketing agreements. These parties that are not affiliated
with us have agreed not to use this information for any other purpose.
Policies and Practices to Protect Confidential Information
Only those employees that have a business need for personally identifiable data
about our customers are given access to that information. We maintain physical,
electronic and procedural safeguards that comply with federal standards to
protect your nonpublic personal information. For example, we take precautions to
help keep our information systems secure, including the use of firewalls for our
Internet-based systems. We also use, when appropriate, encryption technologies,
user authentication systems and access control mechanisms.
/1/ For purposes of this notice the term "We" includes AEW Real Estate Income
Fund and CDC IXIS Asset Management Services, Inc.
/2/ For purposes of this notice, the terms customer or customers include both
shareholders of AEW Real Estate Income Fund and individuals who provide
nonpublic personal information, but do not invest in the Funds.
14
[LOGO] AEW
CEAEW58-0703
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved.]
Item 9. Controls and Procedures
The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.
Item 10. Exhibits.
(a) Code of Ethics - Not applicable.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AEW Real Estate Income Fund
By: /s/ John T. Hailer
--------------------------------------
Name: John T. Hailer
Title: President & Chief Executive Officer
Date: September 24, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ John T. Hailer
--------------------------------------
Name: John T. Hailer
Title: President & Chief Executive Officer
Date: September 24, 2003
By: /s/ Nicholas H. Palmerino
--------------------------------------
Name: Nicholas H. Palmerino
Title: Treasurer
Date: September 24, 2003
EXHIBIT INDEX
(b)(1) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2 under the Investment Company Act of
1940
(b)(2) Certifications of principal executive officer and principal financial
officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.