Can property investment provide diversification?
Investors burnt by commercial property funds should take another look at the sector says Marcus Phayre-Mudge.
Interview from www.telegraph.co.uk:
After more than two decades in the sector, Marcus Phayre-Mudge knows a thing or two about investing in property. But instead of bricks and mortar, his TR Property Trust invests in property equities, making it more liquid than the average commercial property fund.
“Property equities – as opposed to physical property – let us focus on particular target sub-markets as well as particular corporate structures which we believe will outperform their peers,” he said.
“The key is to focus on businesses which have the capability of making purchases that boost earnings in this environment. Investors must avoid businesses with inappropriate balance sheet structures and those invested in markets which are ex-growth.”
To this end, the trust invests in Europe – but avoids those countries most affected by the eurozone crisis. Instead, the fund focuses on the core markets of London, Paris, Germany and Sweden.
Property shares have had a good year so far. From the end of March until the end of September the sector saw share prices increase by 5.1pc, compared with a fall of 0.5pc in the wider European equity market.
