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Ignis Property
HR Man
Posted: 06 November 2012 09:59:12(UTC)
#1

Joined: 20/08/2011(UTC)
Posts: 5

I am a holder of units in the Ignis Property fund as it is the only commerical property fund that pays out monthly income but I have noticed that although it is 100% invested in property its price dived 4.5% in just one day last Friday (1/11/12).

I can't find any obvious reason for this unless that was the day the properties were valued? Does anyone have any thoughts why such a fund should reduce by this amount in one day. It did have a very, very low volatility rating of just 0.75% per annum that attracted me to it as well but it looks as if that might have gone for a burton!
jeffian
Posted: 06 November 2012 12:11:02(UTC)
#2

Joined: 09/03/2011(UTC)
Posts: 169

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H R Man,

I know nothing about Ignis, but a starting point for anything like this is to go to source information such as the company website where I found this -

"*On the 2 November 2012, the Ignis UK Property Fund moved from offer to cancellation pricing in line with the fund’s pricing policy. This reflects a period where net flows have become less consistent than that experienced earlier in the year, with a tendency to net outflow in more recent weeks."
Roydo
Posted: 06 November 2012 12:45:23(UTC)
#4

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Probably spot on Jeffian. Very same thing happened to Standard Life property fund a few years ago. Usually a temporary move until liquidity improves.
Jeremy Bosk
Posted: 07 November 2012 00:37:49(UTC)
#5

Joined: 09/06/2010(UTC)
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There has been a lot of speculation about the big banks, who own most of the loans used to buy commercial and industrial property, being forced to recognise that those properties are overvalued. If so, their loans would be in breach of lending conditions on loan to value ratios. They would then be forced to call for the repayment of the loans immediately. Which would trigger a spate of bankruptcies in the property industry, forced sales and a decline in values of property investments.

This may be idle speculation or it may be rumours put about by the many vulture funds who have raised enormous funds to use in buying up these hypothetical forced sales. Or of course it may be true.

Time will tell. For what it is worth, I hold shares in several REITs and property finance companies. Sound ones: I believe after doing my research.

The price of your unit trust has been adjusted to discourage panic sales by investors, which might, in a chain reaction, force the fund to make sales at knock down prices. That is one excellent reason to avoid any kind of open ended fund. They are vulnerable to investor panic attacks.

There are REITs (closed ended funds) which pay quarterly dividends (e.g. Schroder Real Estate Investment Trust) and by splitting your investment between different REITs you can stagger the arrival of dividends.
If necessary get two dividends in February and don't spend one until March. Do a little creative thinking :-)
HR Man
Posted: 09 November 2012 11:00:18(UTC)
#3

Joined: 20/08/2011(UTC)
Posts: 5

jeffian;16771 wrote:
H R Man,

I know nothing about Ignis, but a starting point for anything like this is to go to source information such as the company website where I found this -

"*On the 2 November 2012, the Ignis UK Property Fund moved from offer to cancellation pricing in line with the fund’s pricing policy. This reflects a period where net flows have become less consistent than that experienced earlier in the year, with a tendency to net outflow in more recent weeks."


Many thanks for this -I can appreciate what has now happened. I have split my property funds between Ignis and FCPT and I am now thinking that the latter as a closed end fund might be more prudent especially as FCPT has a highly yield (5.6%) paid monthly and is up 3% this year compared to I think -5% across most property funds.

Thanks again
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