IPD has released third quarter 2008 results for its UK Pooled Property Fund Indices (Sponsored by HSBC Global Asset Management (UK) Limited and AREF). For the fifth quarter in succession unlisted fund total returns were negative, delivering -6.8% for the quarter and -24.0% over the full year - the worst 12 month performance since the inception of the index in 1989.
Over the three months to 30th September 2008, the All Pooled Funds Index lagged other types of UK property exposure, with listed property companies and trusts, combined in the FTSE Real Estate Index, returning 3.2%, and direct property (tracked by the IPD UK Monthly Property Index) delivering -4.8%. However, over the same period the wider UK equity market (as reported in the FTSE All Share Index) lagged well behind Pooled Property Funds, recording -12.2%.
Cameron McVean, Head of Fund Services at IPD, said: "Despite negative performance during the past year, pooled property funds continue to outperform other major asset classes by significant margins over the longer term. For the 10 years ending September 2008, the All Pooled Funds Index recorded a 9.2% annualised total return, against 3.7% and 5.1% for equities and gilts respectively. Pooled property funds were also marginally ahead of the direct property market (tracked by the IPD UK Monthly Property Index) which recorded a 9.1% annualised total return over the same period."
On a fund by fund basis, returns for the three months to September 2008 exhibited a 22.9 percentage point range, from -23.5% to -0.6%; this was narrower than the previous quarter. Over the year the margin between the worst and best performing fund was 53.3%, with the top fund returning -1.5%. The results also reveal that those specialist funds, concentrating on non-traditional sectors such as student accommodation and healthcare, have continued to outperform their peers during the down turn.