Investors keep purse strings tightened

DOMESTIC property securities funds have lifted their funds under management, but money inflow remains weak and is close to zero, according to the independent researcher Adviser Edge.

The Adviser Edge Domestic Property Securities Funds Review found in the 12 months to March 2010, a majority of funds experienced increases in FUM which was a real turnaround from the previous year. The only fund to record a decrease in funds under management was the Maxim Property Securities Fund, driven by net outflows over the year.

But the increases in FUM was largely due to the rebound in REIT markets, with accounted for almost 100% of total FUM. The S&P/ASX 200 A-REIT index was up 38% over the period.

Adviser Edge found funds recorded negligible fund net flows which were close to zero.

Although some funds recorded positive net fund flows, with the APN AREIT Fund, the BT Wholesale Property Securities Fund, the Aviva Investor Property Securities Fund and the RREEF Paladin Property Securities Fund all recording material net inflows.

The Legg Mason Property Securities Trust was the worst performing fund on this basis, recording net outflows of $55 million (or 32% of funds under management).

Of the 12 funds which participated in the review, seven received a rating of four stars or higher. Advisers Edge said this is an excellent achievement and reflects the quality of fund managers under review.

Four Funds were upgraded and five ratings remained unchanged, whilst there were no downgrades in ratings. Additionally, three funds were rated for the first time. The median rating was 4.0 stars, an increase from the previous 3.75 stars.

In the past, Adviser Edge has also rated the Challenger Wholesale Property Securities Fund, the Colonial First State Wholesale Property Securities Fund, the EQT SGH Wholesale Property Income Fund, the Credit Suisse Property Fund, the Zurich Investments Australian Property Securities Fund, the SGH Professional Investors Listed Property Securities Trust, and the UBS Property Securities Fund. These Funds declined to be rated on this occasion, and therefore any previous ratings are no longer valid.

Australian Property Journal