I am looking for industrial proeprty LPT’s/LIC’s atm. In particular I’m looking for funds trading at a discount to NTA. so :
1. Has anyone got any info on these as I can’t find very much around.
2. is there any difference between an LPT and LIC ??? All I think I know is that both are closed ended, exchange traded, around 50% leverage ?? where can I find a list with comparative stats (NTA, div yield, price) ?
3. Anyone invested in Wilson IF or hunter hall global LIC’s or contemplated ??Most people on here won’know what you are talking about. I must assme you are referring to the following…
LPT – Listed Propert Trust
LIC – Listed Investment Companies
NTA – Net Tangible AssetsRobert Bou-Hamdan
Mortgage Adviser0414 347 771
[email protected]
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdthanks robert, should not use acronyms. Although they are exchange traded, few retail share investors have much interest in them as they are percieved slow & low volatility. I suspect they are sold mainly on advice of investment advisors in a diversified portfolio strategy.
Except that they have been floating on air (and about to drop ?) in the last 5 years with 15-20%pa returns. Advantages are : diversification, good div yield, liquid.
I am not aware of any LPT returning 15-20% p.a.
As for LIC’s, these are high risk unless they have a strict charter based on secure investments whereby their returns would be minimal.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdLIC’s : yield around 8%, capital appreciation the rest. Some have done better eg WAM capital 25% this year to Sept. This still underperformance compared to the broad shremarket which appreciated 30% in the last year.
I am not sure what the difference between LIC’s and LPT’s is. I am just looking for something that tracks industrial RE. A share traded index stock would be ideal but I don’t think there is such an index. The next best I suppose would be a mutual fund or LPT devoted to industrial propr.
stuff it LIC’s too hard to understand. Checked out LPT’s. Only a couple are trading at discount to NTA. THis was not the case when I last had a good look (2000), the majority were trading at discount to NTA. Also yields are lower, most around 6%
Maybe people have shifted some from direct property to here ? Share property index has done quite well this year (up 5% just in the last month). Maybe not a good time to get in. But still more attractive than most direct property atm.
I recently bought (1/12/2004) into a 100% geared fund – Macquarie Fusion. I am awaiting the first set of figures but I chose 75% Australian Shares and 25% International. I consider this a much better investment return wise with the downturn in property prices recently and expected to continue for a few years.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdI think you should speak to a broker. Very strange to bring up on this forum if you ask me.
But anyway, you want returns buy Westfield Property Trusts. Great returns and can only get bigger and better. There are a few others to consider, but the easiest place to find them all is the Weekend financial review, they have an entire section on them every week. All the stats plus more.
If that doesn’t help you, any online broker has lots of stats, and all free once you register with them. That is also free.
Byronent
Adelaide SAObiwan,
For some general info, have a look at some of the links on this page:
http://www.asx.com.au/markets/LMIs_AM2.shtm
GP
Thanks for the link. I gave my boker the ding a long time ago. Fin does not list LIC’s in any section I can find (maybe they’re all in general industrial). These are all property vehicles in a diversified portfolio so why not mention it here ?
Not many people seem to have an interest in anything other then westfield and lend lease.
I sold my IP’s recently and was thinking of a small amout in something more liquid in the short term but think I will give the whole property field a pass and stay in cash. It’s very hard to stay in cash very long as it really burns a hole in your pocket.
Actually most are with Westfield for a few reasons.
1. Largest property trust
2. Very aggressive growth both current and projected
3. Healthy NTAYour broker needs to be replaced.
I didn’t say Fin Review. I quoted Weekend Fin Review. Very different, available only on Saturdays. It has the entire market broken up in sections.
Visit any online stock broker and you will have your info. I use http://www.comsec.com.au
Cash is good idea, but why is my question? Are you waiting on something?
Byronent
Adelaide SAmy gotten, you are right I do need to get a broker ! This is ridiculous. I have an account with comsec but since I haven’t used them since 1999 I’ve forgotten my password and account number and have this fear that they will make me physically come into a bank branch and wait at customer relations for hours and then the branch will close and the A/C’s will turn off and then the air will run out…
So I’m more in cash out of laziness and disorganisation. I think if you have an IP this is implicitly bullish about property. Next step down is exchange traded property assets. Further down bearish track is no property and equities, then cash, then gold and resources. As I have no major directional view at the moment I should maybe park some in equities with more of a splattering of resources as I am leaning towards the bearish side.
Anyhow your tactical asset allocation between property/bonds/stocks/ cash has a significant effect on your returns. Some people say as much of an effect as the particular property/ share/ bonds you choose. Currently I am 40% property (PPR, 2 industrial), 40% cash, 20% equities. This is a ridiculous amount of cash if nothing calamitous is happening soon. So I think I need to get more exposure to equities. Unfortunately lots of other people have done the same and I am worried by the near verticle move in our sharemarket in the past few months.
I guess the problem is where to park this capital until things trough in property and when everything else looks to be overvalued.
I’m glad you all like Westfield, as I have a pretty large proportion of my net wealth in the company (Due to its continual appreciation). But I should point out that there are no longer seperate Westfield Trusts. Westfield Trust, Westfield America Trust and Westfield Holdings have all been stapled together and now trade as Westfield Group.
Not a simple property trust anymore, but still a good investment IMHO.
APerry, the fact it has united is what makes it so exciting. You get a good spread and it is leveraged extrememly well. NO decline in one market will have a huge impact. They need 3 seperate markets to collapse to shake it. Very clever whoever came up with that.
Obiwan, again I am not sure what to say except if the sky does fall, we all die so it doesn’t matter. I too am moving from residential to commercial and industrial where I can. I strongly believe the returns are better and although riskier for the novice, very rewarding if you get the mis correct.
Call Comsec, (and now I don’t have an association with them!) on 131519, tell them your account number or name, they will ask a question or two and you are back on air. They don’t can accounts so you are with them without a doubt, no entering any branches to die the horrible death you just described.
Failing that, go buy yourself some gold and put it in the safe. Wait, what if the house burns down and it melts and falls into the earth, bye bye cash. Personally if that is the way of your future, I would be buying equities in companies that are strong in the commodoties of your choice.
Investing is a complicated game and depending on your view, long or short, you will choose an asset class or classes that suits. We have information overload around us and let too many things influence every decision.
Byronent
Adelaide SAI preferred just having Westfield Holdings, but I have no plans to sell any of my shares. So I agree with you that it is a very good company and investment.
What I was wanting to point out is that it is now one entity, where as it used to be 3 (it was referred to above as “trusts”). It is also not a simple property trust, as it is heavily involved in construction and development, and also manages some centres that it doesn’t fully own.
What do you think of the Macquarie ALPS investment?
Your capital is guaranteed and the initial return is set at 13.20% per annum. They select 64 companies from the top 200 ASX listed companies. For every one of these companies that drops in value by 50% or more, your annual return will reduce by 2.20%.
If 6 or more companies drop off, your return is zero but you get your capital returned to you after the 6 year investment term. I have not read the PDS yet but I want to confirm if you receive the yields that accumulated before returns went to zero.
I wish there was a shares and alternative investments section in this web forum. (Hint Hint – Wink Wink – STEVE!)
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdfusion product is interesting, make sure you get a good margin rate and no front end fees on the funds. In 2000 I bought into colonial geared fund, as margin lending on a mutual fund was not as available. Margin loan is better as you can select the funds yourself rather then be limited to a fund that has a levered structure inbuilt. If you are going to get a margin loan then volatility will be less on a fund that individual stocks presumably and you are more diversified.
Don’t know much about the Macquarie ALPS investment. Sounds like a geared portfolio with some put options. You could achieve the same thing more cheaply by structuring the portfolio yourself but you might need a lot more capital to do this cheaply. In this sense it may add value. It depends on 1) the amount of leverage 2) the riskiness of the investments (companies, are they shares, bonds, prefs etc). The problem with the structured products is that usually a lot of margin is included to the issuer if they are still a niche product. I remember when installment warrants and other warrants came out these were supposed to be a good deal but it was cheaper to get a margin loan yourself. The secondary market for these was illiquid and you couldn’t offload if you needed the cash except to the issuer at a hefty discount (HUGE buy-sell spreads).
I think I will try to stick to low cost margin loans, low cost mutual funds (eg index/vanguard) and products that are in the mainstream as they are tend to be cheaper. I looked at comsec again today and can’t believe they offer stop losses, this was unheard of for a discount broker previously.
That is old news at CommSec.
Regarding Fusion, I got the upfronts waived going directly through Macquarie. They did this when I told them I would go to a discount broker to get the same deal and they would have to pay them a commission on top of not receiving an upfront fee.
In any case, I geared 100k at 100%. I still haven’t seen the results for the issue (1 December 2004). Fusion is a fund of funds with a choice of 7 fund managers. 3 of those were more index tracking type funds which I like to steer clear of. I chose 75% aus shares and 25% international to diverisfy a little out of the remaining 4 funds.
ALPS sounds ok and would be very difficult to do yourself with 100k at the same levels of return expected from the ALPS. I don’t think I will be proceeding with this one as the only way to go is down and I don’t think locking in for 6 years is a smart move especially if the rate drops below the margin rate in the first year f I was to gear at 100% again.
At least with Fusion, there is no limit to the upside and there is a capital guarantee (put option) so the downside is limited. The guarantee is reviewed each year and moves up with any capital value increases but cannot come down. The only possible losses are the interest I pay on the 100k which is deductible and the inflationary impact on the money which is not mine anyway.
I will be undertaking a series of these 100% geared investments all year around to stagger the maturity dates and spread the risk. I will stop doing this when I see the market preparing to head south and sit it out until it picks up again. These 100% geared capital guarantee products are great!
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdso is there a fee if you want to get out early ? How much of a floor does the capital protection provide ? Staggering the maturity dates is good, but one year does not give you a large timeframe to dollar cost average.
Be careful of leverage if you are new to sharemarket. It is usually the main reason for big losses, along with being underdiversified/taking too much firm specific risk. Things are not fantastic value currently and I would tend to leave my powder dry for when things are bargain level. That being said we are coming off a base from 2001-3 where things moved nowhere. But the move in the last year of 40% means there is little support if things head south again.
No fee to get out early but the capital guarantee does not apply. This is a problem if the prices are down.
The capital protection is 100% of the investment.
What I meant by “all year around” was that I will be buying in Feb, Apr, June, Aug, Oct, Dec EVERY year until I think the market is going to turn. I am not interested in short-medium. I want medium-long term investments.
I am not new to the market and have been gearing for years. I used to double gear on international shares before they brought in 100% gearing on managed funds. It is easier to select your preferred fund and let them worry about it.
I invest when I know I can wear the COMPLETE loss (if stop-loss orders are not available). In this case, it is only the interest on the capital amount for about 5 years if things die before the first increase of the caital guarantee.
I can’t wait to get back into covered calls and puts when I have free time in 2-3 years.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
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