global property investment query

dutchism1958

I am looking to add some global property to my income portfolio which will be used to buy some small luxuries in the years to come.
I am only looking at global options because of the possible volatility of UK/European market following brexit... I stand to be corrected however.
This will make up about 5%(10K) of my total portfolio.I have researched across Trustnet/Morningstar etc and come up with two.
Fidelity Global property inc and F&C Global Real Estate Securities 3 inc.
I would be interested in hearing opinions on these and other fund options within the global property market.
thank You.

ColdIron

I'm not a fan of open ended funds for property. They tend to keep cash on hand to cope with unexpected outflows and can even freeze trading as we saw with M&G and Standard Life after the referendum. A global fund might be less sensitive to regional events but Investment Trusts would be a better vehicle for illiquid assets such as these, they can afford to be fully invested and take a longer term view

dutchism1958

Thanks Coldiron,I had looked at TR property trust but was put off by the European/UK holding and thought global would be safer?.

Alexland

I wouldn't touch an open ended property fund with a barge pole! Not even with 1% of my portfolio. It not luxury to be unable to sell or worse the fund is still being sold by others and you hold so your value will still be destroyed by the asset managers having a fire-sale of underlying assets to satisfy others.

Maybe a closed ended investment trust or ETF might be better if you really want to make this investment. I already have property on my balance sheet in my house which is enough exposure to the asset class for my needs.

Alex

takesyourchances

I am interested in adding TR Property IT to my IT/Income portfolio, any thoughts on this IT?

LHW99

I have held TR Property for more than 5 years, and have been happy with it as part of my portfolio. It represents about 5% of my total investments, and about 10% of my total European exposure.

takesyourchances

LHW99 wrote: »

I have held TR Property for more than 5 years, and have been happy with it as part of my portfolio. It represents about 5% of my total investments, and about 10% of my total European exposure.

Thanks for the reply. I have narrowed a property IT down to TR Property for a bit of diversification after adding infrastructure into this portfolio. That is good to hear you have been happy with your holding of TR.

Thanks again.

dutchism1958

Thanks Alex and LHW99,that is encouraging.

JohnRo

dutchism1958 wrote: »

I am looking to add some global property to my income portfolio..

Have you considered ETFs?

For a single property securities vehicle IWDP is about as global as it gets. It has 55% exposure to the US property market which might be a bit too much for some but with over 300 constituents there should be plenty dilution if any one company hits the rocks.

If 55% is too high another option might be to hold VNQ and VNQI together in whatever proportion you deem fit. That will entail a platform with international access, completion of a W-8BEN form and transaction FX fees though.

dutchism1958

Thanks JohnRo, I'll check these out.

ColdIron

Something to be aware of with TRY is that the bulk of it is not held in direct property. From the factsheet

The Company’s investment objective is to maximise shareholders’ total returns by investing in the shares and securities of property companies and property related businesses internationally and also in investment property located in the UK

It's a little like the difference between investing in physical gold and gold miners. This is not necessarily a good or a bad thing just a factor you should take into consideration. I imagine it's much easier to get exposure to global property via equities and may be sufficient for your purposes. TRY was on my potential buy list

For my property slot in my SIPP I have F&C Commercial Property Trust (FCPT) a bricks and mortar UK IT invested in the office, retail and industrial sectors. I'm happy with the domestic exposure and its yield of 4%+ ticks my income box. This is not a recommendation

Not all property investment companies are the same. In 2005/6 a friend invested significant amounts in a couple of funds, one was Glanmore. It looked impressive with an almost metronomic rise upwards for a decade but during the GFC it fell off a cliff and the clients were, rightfully, locked out from redeeming their funds to stabilise the price but it didn't help and it hit the bottom anyway and stayed there

A cautionary tale. As ever, do your own research and know what you're investing in