This article is from the Australian Property Journal archive
The AMP Capital Core Property Fund has being awarded a ‘Superior’ rating.
Managed Investment Assessments’ director Anton Lawrence said the fund offers investors attractive forecast total returns backed by a very strong track record and diversification attributes that are difficult to achieve in the property investment market
“The AMP Capital Core Property Fund is a new breed hybrid fund, distinct from traditional hybrid funds which typically feature an even split between direct property and Australian LPTs.
“The inclusion of a global property securities component makes this fund unique and enhances the return prospects. The diversity of asset classes provides investors with a balance between return volatility and liquidity,” he added.
Lawrence said the recently advised strategic stake in another large wholesale fund managed by AMP lifts the direct property exposure to over 60% which should provide attractive total returns over the short term.
“However, investors should be aware that the strategic use of gearing by AMP adds an additional layer of risk to the fund. But this is typically only drawn down for short periods of time and repaid through equity inflows.
“The strategic overweight position to the retail property sector based on positive revaluations may under perform the returns generated by sectors within the global property securities portfolio,” he added.
Lawrence said AMP’s total return for the year to September 30 2006 was 20.49% which exceeds MIA’s comparable benchmark by 35%.
“The fund’s current tax advantaged income component of 30% is lower than the benchmark of 47%. Compared with similar products the buy/sell spread for this product is significantly lower than the peers.
“From an MER viewpoint, the Fund’s MER for platform investors of 1.1% is marginally higher than our benchmark average of 1.04%,” he concluded.
By Nelson Yap
