Standard life property fund

oceanobsession

Hello to everyone, im currently investing 25% into the standard life property fund should i stay investing or pick another fund ive got 18 yrs to go before im 65

cheers oceanobsession

dunstonh

We can tell you in 18 years time if its best to stay in there or not.

Property funds are probably going to bottom out this year. Indeed, its noticeable that the recent trend is seeing unit prices grow without any adjustments. If that continues, then its a good thing. If it doesnt, then its not. 25% is a bit on the heavy side though. A typical portfolio should really be holding no more than say 10%. 15% at a push.

theGrinch

25% seems a significant amount of a portfolio, considering the other funds, assets etc available. however, if you are well versed in their operations and confident enough, then you would be buying on a relatively low price.

these property funds have a pretty inglorious short track record so far. why that particular fund over any of the others?

EdInvestor

theGrinch wrote: »

these property funds have a pretty inglorious short track record so far. why that particular fund over any of the others?

Depends which property fund you mean.Many of those investing in real property - actual buildings - have been around for many years and have a long record of stable returns, the recent volatility is fairly unusual.

Property funds based on property shares, and particularly internationally listed shares, are a comparatively recent innovation and have thus missed out on the stable history and displayed only the volatility.

Which particular SL property fund is the OP invested in?

oceanobsession

EdInvestor wrote: »

Depends which property fund you mean.Many of those investing in real property - actual buildings - have been around for many years and have a long record of stable returns, the recent volatility is fairly unusual.

Property funds based on property shares, and particularly internationally listed shares, are a comparatively recent innovation and have thus missed out on the stable history and displayed only the volatility.

Which particular SL property fund is the OP invested in?

yep sorry its the standard life stakeholder property fund

cheers ocean

dunstonh

these property funds have a pretty inglorious short track record so far.

Some of them have been going for decades. Most have had two years of losses following around 16 years of continuous growth. I wouldnt call that an inglorious track record.

They provide useful diversification. For example, despite the stockmarket crash, most are down less than the stockmarket. During the tech stocks (and other issues) crash at the start of the millenium when the markets dropped 43% property funds continued to turn in double digit returns.

theGrinch

dunstonh wrote: »

Some of them have been going for decades. Most have had two years of losses following around 16 years of continuous growth. I wouldnt call that an inglorious track record.

They provide useful diversification. For example, despite the stockmarket crash, most are down less than the stockmarket. During the tech stocks (and other issues) crash at the start of the millenium when the markets dropped 43% property funds continued to turn in double digit returns.

if you go to trustnet and under "performance tables" look for property, then the 34 quoted have been truly truly awful. only one had been going for 9 years plus, most are johnny come latelys, everyone in operation has lost money over 9, 7, 5, and 3 years. thats not to say now is a bad time to buy, but those seem the facts from those tables.

which ones did you have in mind? I take it that the ones you and I are thinking are different!

dunstonh

which ones did you have in mind? I take it that the ones you and I are thinking are different!

I think you are looking at the wrong funds. Possibly mixing up bricks and mortar funds with property share funds? or perhaps not looking at the right tax wrapper (property funds have existed for much longer under life funds and pension funds than they have as unit trust/oeics). The Std Life fund mentioned above is a bricks and mortar fund and is in the pension tax wrapper.

if you go to trustnet and under "performance tables" look for property, then the 34 quoted have been truly truly awful.

Looking at Financial Express (which is the retail version of trustnet) there are 84 property funds (not including different versions/series of the same fund. So, its 84 master funds). Most of the internal funds have been running since the 1980s. Only the external funds are more recent but they are mostly based or reinvested into the unit trust version. So, the launch dates appear newer than the main fund itself.

Focusing on Std Life's fund, it was launched 17-03-1980. Its grown 519% since launch and is currently back to Spring 2004 prices.

Since 29th DEC 1989, the std life fund has returned 216.32%. The UK all companies sector average (UK equity) has returned 213.47%. So, the Std Life fund has been UK equity in that period but nto much in it. Indeed, if you follow the falls in the UK equity sector going back over the recent years and property you will see a very close link. That is unusual historically. However, its probably due to the fact that this crash was based on debt and the boom based heavily on property.

EdInvestor

You need to compare UK property securities (invested in property shares)

http://www.trustnet.com/Investments/Perf.aspx?univ=P&Pf_Sector=P:UPS

with UK Direct Property,( invested in bricks and mortar.)

http://www.trustnet.com/Investments/Perf.aspx?univ=P&Pf_AssetClass=A:&Pf_Sector=P:UDP&Pf_sortedColumn=NameFull&Pf_sortedDirection=Asc


Quite a big difference.

theGrinch

Ok, I assumed it was bricks and mortar.

If we are talking investing in the shares of property related companies, then personally, I would be strongly inclined to use something like an ishares property fund, or buy the shares directly - checking performance regularly.

If the OP wants to invest 25% in such an area, then I implore the OP reads around the sector and the companies and becomes an "expert" on such shares/sector. Its a pretty hefty sector bet.