A survey into the use of derivatives by Australian property funds

Derivatives have gained an increasing attention by academics and practitioners in recent years. However, there is relatively little evidence on the patterns of use and the property funds' attitudes with respect to derivatives. Therefore, this study seeks to address this shortfall and aims to examine the usage of derivatives by property funds in Australia. A survey of Australian property fund managers was undertaken. The results show that different types of property funds have dissimilar patterns of derivatives use. Besides, the results also reveal that large property funds are more likely to use derivatives. The motivation factors and risk factors for using derivatives are also identified. In addition, significant differences are found between the perceptions of derivative users and non-users. The findings have offered some insights into the knowledge base of property investors towards derivatives.