IPD has released fourth quarter 2008 results for its UK Pooled Property Fund Indices, sponsored by The Association of Real Estate Funds (AREF) and HSBC Global Asset Management (UK) Limited.
Total returns for all pooled funds in the fourth quarter were -18.7%, taking annual returns for 2008 to -32.0%, compared to -6.7% over 2007.
Reflecting both fund level costs and gearing effects, the All Pooled Funds Index returns for the year fell short of those to direct property, as measured by the IPD UK Monthly Property Index, which delivered -22.5%. They also marginally underperformed the UK equity market, as reflected by the FTSE All Share Index, which recorded -29.9%. However, listed property companies and trusts, as measured in the FTSE Real Estate Index, proved even more vulnerable to global market pressures than did unlisted pooled property funds, returning -46.6% over 2008.
Within the 64-strong fund universe which has an aggregated net asset value of £24.2bn the 27 balanced funds delivered a total return of -13.4% over the final quarter and -23.9% over the year. By comparison specialist funds, which include some highly-geared vehicles, returned -24.2% in the fourth quarter and -40.0% over 2008.
Annualised total returns for all pooled funds over three, five and 10 years now stand at -8.5%, 2.2% and 6.8% respectively. Over 10 years Pooled Property Funds continue to lead all other major UK asset classes.