This article is from the Australian Property Journal archive
ADVISER Edge has placed its four-star rating on the AXA Australia Property Fund on hold, citing concerns over the fund's move towards highly illiquid investments.
The on hold status means that the current rating assigned to the fund by Adviser Edge is no longer relevant due to material announcements being made by the fund.
Adviser Edge said this action was taken following the recent change in the asset allocation of the fund towards a highly illiquid direct property allocation.
At the time of rating the fund in September 2007, the asset allocation was approximately 50% direct property assets with the remaining allocation invested in listed real estate investment trusts and cash. Currently as at July 31 the direct holding now constitutes 85% of funds under management with 15% held in listed real estate investment trusts and cash.
Adviser Edge understands that the asset allocation change has occurred primarily due to a number of direct property acquisitions made earlier this year as well as the fall in value of domestically listed real estate investment trusts over the course of 2008.
“We are taking this precautionary view in response to the change in the asset allocation of the fund,” Adviser Edge’s head of property research Louis Christopher said.
“This action does not necessarily mean the fund will be downgraded. However it is viewed as a necessary step to ensure investors are kept informed,” he added.
Christopher said AXA has communicated to Adviser Edge that wishes to participate in a full review of the fund. The full review will occur in September 2008 with a revised rating provided to the market by November 2008.
It should be noted that AXA Australia has also communicated to Adviser Edge that it is currently meeting redemption requests as they arise.
Australian Property Journal
