John Snowden
Australia’s ageing population is fuelling an upswing in the popularity of listed property funds (LPF), with 81 per cent of advisers having placed investments in the asset class in the last 12 months, as revealed by new Assirt/Wealth Insights research.
The survey of more than 400 financial planners discovered that LPFs are the third most utilised asset class, following closely behind Australian and international equities respectively.
It also showed that Colonial First State polled top position in this space by having the most advisers (27 per cent) placing business with it in the last year.
The top three also included AMP with 20 per cent of advisers investing in the fund manager, and Vanguard, which ranked as third most popular with 18 per cent of advisers using its services.
ColonialFirstState head of listed property securities John Snowden believes the number of retail investors in LPFs has increased significantly due to a mass-retirement phenomenon occurring globally.
“You will find that throughout Europe, the UK, the US and even many Asian countries, there are less people being born than what there has been in previous decades, which means there are more and more people retiring and much fewer new workers coming through,” he said.
“The high-yielding nature of the asset class is very attractive to retirees because they need money to live on, and in wealth management terms their time horizon is typically much shorter than somebody in their mid-20s, who might have another 40 years of work ahead of them.”
It is a phenomenon that Standard & Poor’s associate director of fund services Peter Ward believes will continue and even increase in coming years.
“The international property securities sector has grown quite significantly over the last 12 months,” he said.
“At least over the last 18 months to two years there has been a proliferation of new international property securities funds into the Australian market.
“There are a lot of opportunities offshore and there are a lot of benefits to investors, including low correlation across the globe between the various property markets.
“I think there is a lot of potential growth in the international property securities market, and it is a sector that will continue to do quite well, but will probably be more volatile than the Australian property securities market.”
