Thoughts re property funds?

Aged

I've been having a browse around at the various options. Apart from investment trusts, which I fear I don't understand well enough to invest in, one or two other options have caught my eye.

The Legal and General UK Property PAIF seems like what I WAS looking for - a very low risk score, listed in the Advisers Fund Index but unrated re FE Fundinfo crowns. OCF reasonable at less than 1%. It's Direct Property though, ie a bricks and mortar property fund, so that puts me off it a bit from what people here have been saying.

Next lowest on the risk scale is Columbia Threadneedle Property Growth & Income, also AFI listed, and it has 5 FE crowns. OCF just over 1% so a bit pricier than the L&G one but for a good well managed fund I might be prepared to push the boat out. 

Other than that I'm surprised by the risk levels quoted for some of the property share funds and trusts - being 'low risk' was one of the attractions of investing in property for me.

Albermarle

Other than that I'm surprised by the risk levels quoted for some of the property share funds and trusts - being 'low risk' was one of the attractions of investing in property for me.

It is not low risk, but it can be a useful diversifier from the usual equities and bonds.

Linton

Prism said:

Linton said:

dunstonh said:

Aged said:

Prism said:

Investment trusts directly or open-ended funds or ETFs that hold a bunch of those trusts.

I thought Dunston said open-ended funds were problematic nowadays? Or am I misunderstanding you?

Bricks and mortar property funds are problematic.    Property share isnt.

True, but I dont see property holding equity as any thing like the same thing as a holding of property.  Surely the point about buying actual property is that it is independent of the volatility of the stock market.  The failure of property OEICs thanks to the demands of fund holders wanting instant access to their money removes property completely as a viable investment for the small private investor.  Unless someone knows of some other vehicle.

REITs or funds of REITs?

Wont REITs and thus funds of REITs be subject to market volatility, which is what one is trying to avoid by buying property? Though looking at the graphs that does not seem to be the case - why not?

Prism

Linton said:

Prism said:

Linton said:

dunstonh said:

Aged said:

Prism said:

Investment trusts directly or open-ended funds or ETFs that hold a bunch of those trusts.

I thought Dunston said open-ended funds were problematic nowadays? Or am I misunderstanding you?

Bricks and mortar property funds are problematic.    Property share isnt.

True, but I dont see property holding equity as any thing like the same thing as a holding of property.  Surely the point about buying actual property is that it is independent of the volatility of the stock market.  The failure of property OEICs thanks to the demands of fund holders wanting instant access to their money removes property completely as a viable investment for the small private investor.  Unless someone knows of some other vehicle.

REITs or funds of REITs?

Wont REITs and thus funds of REITs be subject to market volatility, which is what one is trying to avoid by buying property? Though looking at the graphs that does not seem to be the case - why not?

The property sector is pretty volatile - more so than general equities, That is the trade of vs liquidity. Not sure anyone is trying to avoid that especially.

Aged

Going back to PAIFs, I now understand that they're no longer recommended because of the liquidity issue. However, the L&G PAIF actually IS recommended and rated as a very good fund by the likes of the AFI, H&L and others. Seems a bit contradictory, not to mention confusing. Can anyone clarify?

dunstonh

However, the L&G PAIF actually IS recommended and rated as a very good fund by the likes of the ASI, H&L and others. Seems a bit contradictory, not to mention confusing. Can anyone clarify?

Do not mistake marketing lists as recommendation lists.

Audaxer

dunstonh said:

Aged said:

Prism said:

Investment trusts directly or open-ended funds or ETFs that hold a bunch of those trusts.

I thought Dunston said open-ended funds were problematic nowadays? Or am I misunderstanding you?

Bricks and mortar property funds are problematic.    Property share isnt.

I was under the impression that Investment Trusts were thought to a better choice than open-ended funds for holding physical property?

Aged

dunstonh said:

However, the L&G PAIF actually IS recommended and rated as a very good fund by the likes of the ASI, H&L and others. Seems a bit contradictory, not to mention confusing. Can anyone clarify?

Do not mistake marketing lists as recommendation lists.

I thought that the Advisers Fund Index (AFI, not ASI as I put above) was indeed a recommendations list?

dunstonh

I thought that the Advisers Fund Index (AFI, not ASI as I put above) was indeed a recommendations list?

It's not.

It is made up of just 18 wealth managers/DFMs.  Each panellist firm has to submit up to 10 holdings.   FE then aggregate each of those to create the three indexes.   The panellists are instructed to assume that that is saving for retirement (full withdrawal) at 65 with cautious being someone in their late 50s, Balanced in their mid 40s and Aggressive someone in their late 20s.  i.e .time weighted ratios

the benchmarks they use are not reasonable.  e.g. IA Flexible Investment.

They are not portfolios/funds that the are used in real life.  And given there is no risk rating applied other than time weighting, they are very subjective.  I also get the feeling one or more of those 18 firms is getting bored as multi-asset funds appear in the list.  Some funds indicate a certain strategy which would be unsuitable if used in a different strategy.

Aged

dunstonh said:

I thought that the Advisers Fund Index (AFI, not ASI as I put above) was indeed a recommendations list?

It's not.

It is made up of just 18 wealth managers/DFMs.  Each panellist firm has to submit up to 10 holdings.   FE then aggregate each of those to create the three indexes.   The panellists are instructed to assume that that is saving for retirement (full withdrawal) at 65 with cautious being someone in their late 50s, Balanced in their mid 40s and Aggressive someone in their late 20s.  i.e .time weighted ratios

the benchmarks they use are not reasonable.  e.g. IA Flexible Investment.

They are not portfolios/funds that the are used in real life.  And given there is no risk rating applied other than time weighting, they are very subjective.  I also get the feeling one or more of those 18 firms is getting bored as multi-asset funds appear in the list.  Some funds indicate a certain strategy which would be unsuitable if used in a different strategy.

OK Dunston many thanks for that info.