Property Funds & Investments

audrey07

Hi wonder if anyone can help.

Invested money using an IFA. First time investor.

Invested as a cautious investor. Special requirements documents say investments to be in cash or guaranteed investments.

Invested 50% of my investment in Sterling Property Fund and the rest in the Norwich Union Property fund, have now lost all the money I made and am at the moment about £500.00 down on the original investment.

Also invested in Scottish Widows Property Fund which now has the 180 day penalty on it. Scottish Widows Invp High Income and Scottish Widows UK EQ Focus.

Also invested in Artemis UK Small Companies, Schroder Gilt and Fixed Interest and Multi Manger Protected Profits.

Am now beginning to wonder if this investment split is suitable for low risk. Have spoken to the IFA who has told me not to panic.

I am panicking.

purch

Invested as a cautious investor

50% of my investment in Sterling Property Fund and the rest in the Norwich Union Property fund

Sounds to me like your IFA is an idiot, or incompetant, or both.

Property has NEVER been a Cautious Investment and never will be !!!!

dunstonh

Commercial property funds are cautious.
Property share funds are not.

Invested as a cautious investor. Special requirements documents say investments to be in cash or guaranteed investments.

None of the funds meet that requirement. I recognise that wording. The IFA isnt a representative of Personal Touch are they? They have a really daft risk profile spread and I have picked holes in that before with success. The "cash or guaranteed investments" is miles away from what you have.

[Deleted User]

You invested in your investment during a property price peak and now we are heading towards a trough. You can divest yourself now or wait till the next property peak in 10 years times.

If you cant risk your money investments are not for you, for example those that bought dragon oil shares would have seen their investments half overnight back in the year 2000 and then languish for years, before now being worth over 40 times an original investment.

This is a extreeme example but this is what happens in the markets, one day people are quite happy to buy a part of a investment that yields 1% there is a price crash and then want to divest of something that yields 10%.

Over a period of time most investments have better rewards in the long run over savings, but over a short period you can easily have the NPV halfed or less.

meester

Yant1 wrote: »

This is a extreeme example but this is what happens in the markets, one day people are quite happy to buy a part of a investment that yields 1% there is a price crash and then want to divest of something that yields 10%.

Usually because the 10% yield is the CURRENT price relative to PREVIOUS income, and next year's yield is NOT going to be 10%.

dunstonh

If you cant risk your money investments are not for you, for example those that bought dragon oil shares would have seen their investments half overnight back in the year 2000 and then languish for years, before now being worth over 40 times an original investment.

I had some dragon oil in the early 90s. I got suckered in like many but held on and sold last year with a gain that averaged out to over 14% a year.

You invested in your investment during a property price peak and now we are heading towards a trough.

The general feeling is that commercial property is close to bottom. May be wrong but previous property declines showed residential declines lingered longer than commercial. Fund managers are now reporting that inflows are increasing again (which was the main reason the declines took place) and yields are now more attractive.

I'm not sure its quite a "buy" yet but its certainly a hold now.

Footsie_2

The whole market is down at the moment so the first thing to say is, don't panic. Everyone is in the same boat and it will, in my opinion, go up again.

However you have been mis-sold, as everyone here has said you have not invested in cautious funds. My advice would be to complain to the FSA, www.fsa.gov.uk and go from there. But seek other financial advice before you pull any of your investments, you don't want to make a bad situation worse.

audrey07

Thanks very much to everyone who answered I have a meeting with him coming up soon I did cash in one of the investments I had after he recommended I switch out of the Norwich Union Property Trust and put it all in the Sterling Property Fund (this was November) then I was hit with the 5% deduction they put on their prices. I queried the fact that he was recommending I put all my eggs in one basket but once again I let him talk me round. However I am glad I pulled out when I did because I had totally lost confidence in the advice he was giving me.

I stilll however have the other investments with him so going to meet to talk about this. I have downloaded from the Sterling and Scottish Widows web sites the information on each fund which states how each fund is invested and just how risky they rate each fund - I was shocked when I saw that the majority of mine said high risk I'm going to print them off and take them with me when I see him. I know this sounds really stupid but is this information reliable I mean the stuff you can get from each company website giving product risk factors cos when I told him what I had found he seemed shocked. Also when the money was invested I told him that I could not afford to lose any of it he was aware of my personal circumstances and knew my reasoning behind this request.

audrey07

dunstonh wrote: »

Commercial property funds are cautious.
Property share funds are not.

None of the funds meet that requirement. I recognise that wording. The IFA isnt a representative of Personal Touch are they? They have a really daft risk profile spread and I have picked holes in that before with success. The "cash or guaranteed investments" is miles away from what you have.

What is the difference between commerical property and property shares. Are the Norwich Union ones property shares? I don't think he's a rep of Personal Touch is that a company?

debbie42

audrey07 wrote: »

Also when the money was invested I told him that I could not afford to lose any of it he was aware of my personal circumstances and knew my reasoning behind this request.

I'd have to ask why you're investing in these funds at all if you can't afford to lose any?

dunstonh

What is the difference between commerical property and property shares.

Commercial property funds are often referred to as bricks and mortar funds. The money that is invested actually buys property and the rental income is the return and perhaps any growth in value on the property. These are cautious as they dont fluctuate much historically. The drops in 2007 were the first since the early 90s. Even in the 90s, they only had a year and a bit of drop back then as well.

Property shares are companies listed on the stockmarket who invest into property. You can get greater growth over the long term with these but greater losses as well in the short term as these are stockmarket based and are niche area. Worth having in a diverse portfolio but not to a large amount.

I don't think he's a rep of Personal Touch is that a company?

Personal Touch is a network (support company for IFAs). I dont hold them in high regard and the wording you used for the typed risk profile is almost exactly the same as the one Personal Touch insist their IFAs use. In my opinion their risk profiles are out of sync with the investments they use. For example, your risk profile is cautious and the text says "investments to be in cash or guaranteed investments". Well, that is not cautious but almost no risk (and that ignores the fact that you have been recommended more medium to medium/high!).

I think you have very good grounds for complaint and pointing out that you were cautious. You can use their own suitability report against them. It said that you were cautious and wanted "investments to be in cash or guaranteed investments". So having identified your need and documented that why have they recommended medium to high risk investments?

I would push for the investments to be voided and your money returned with interest.