Does a Property Index Tracker Count as Equities?

Porcupine

I'd look at the holdings, to get a feel for what they invest in. Is it London office blocks or out-of-town distribution depots, for instance? I'd also look at its position in the sector - Trustnet has a nice colour coded box (this is less useful in this case where property share companies are mixed into the sector).

A question for the audience. How does a real estate investment trust like British Land (BLND) compare with a normal investment trust? BLND looks like just another FTSE company, goes up and down like the rest of them. That's to be expected for an investment trust I suppose, but in the IT case all that movement is just discount/premium to NAV - ie it's just froth, and it can't deviate too far from NAV unless people go utterly crazy.

Comparing a fund like Henderson against BLND shows the REIT to track the FTSE in a way Henderson doesn't. Is this because there's lots of debt magic mixed in (that a normal IT can't do), or because BLND is actually a property developer and not like an IT at all (who don't actually run the companies they invest in). Obviously Henderson is only valued a few times a year, hence its curve is very smooth, but BLND doesn't seem to track even remotely the same trends.

Are there any ITs that just do property investing, and not property development? No debt, no speculation, just own a few buildings and collect the rents. Just like normal ITs do with shares.

Your_Hero

_pete_ wrote: »

Thanks again for the helpful and clear suggestions. It seems that:

(a) property needs to be part of my portfolio as one way of maximising the diversity of my asset allocation;

(b) the Blackrock fund does not appear to achieve that particularly well, whereas the Henderson fund does.

So, does the Henderson fund look like a good bet, or are there others which might be more sensible?

....or, a better question might be:

How do you choose which fund to invest in, given that there may be several funds in a particular sector and that past performance is not a guide to future performance? What information do you consider?

Property is an important part of a portfolio and should not be left out. The weighting would depend on your risk profile.

There are many fund indicators to use, Alpha, Beta, Sharpe, Treynor, Information Ratio, R-squared etc, all of which are based on past information. Then other factors such as fund size, fund manager, fund objectives/outlook etc.

This is something your IFA has probably already done before he came to the conclusion to use the Henderson fund. Ask him/her.

masonic

Porcupine wrote: »

Are there any ITs that just do property investing, and not property development? No debt, no speculation, just own a few buildings and collect the rents. Just like normal ITs do with shares.

I'd love to know the same thing. All of the REITs I've looked at seem to have 30+% gearing, lots of development, acquisitions and disposals discussed in their annual reports and look too correlated with equities to consider a diversifier. I'm not really seeing the virtues of REITs or the ETFs/funds holding them.