Property Funds Present Low-Risk Alternatives
With stocks likely to remain bearish healthy into 2009, property funds stand for an eye-catching alternative for a lot of investors seeking comparatively low risk and constant returns.
Among the funds launched lately was a 3.2-billion-baht fund that embraces a 30-year lease on the five-star Centara Grand Beach Resort Samui.
Investing in a property fund permits small investors to invest in different types of properties with little capital, together with apartments, hotels and resorts, residential homes, shopping malls and also industrial estates.
One most important benefit to property funds when compared with straight investment is expediency and liquidity - a property fund keep a manager to manage the asset in response for a fixed fee.
Returns for property funds are comparable to stocks, where investors expand both in terms of dividends in addition to a capital gain - or loss - from changes in the cost of the unit trust.
Paramet Tongbua, head of equity research at Tisco Securities, said property funds put forward better security and less unpredictability than investing in a property stock.
Dividend capitulates for most property funds now vary from 8-9%, well outpacing bank deposits and coming with less danger than investing in shares of a property company, he said.
"Certain funds put forward fixed rate returns for a fixed period, subsequent to which, dividends depend on the working results," Mr Paramet said.
Although investors who subscribed to the primary offer of the fund have observed the value of CTARAF go down to just 9.25 baht per unit compared with its 10 baht par value, payable in part to investor apprehension about the health of the tourism sector.
Mr Paramet said investors should think about how market developments might influence various segments of the property market.
Mr Paramet said the Ticon Property Fund (TFUND) give the impression of being better balanced than others in the present market, as its spotlight on industrial estates meant less unpredictability than other property classes.
Among the funds launched lately was a 3.2-billion-baht fund that embraces a 30-year lease on the five-star Centara Grand Beach Resort Samui.
Investing in a property fund permits small investors to invest in different types of properties with little capital, together with apartments, hotels and resorts, residential homes, shopping malls and also industrial estates.
One most important benefit to property funds when compared with straight investment is expediency and liquidity - a property fund keep a manager to manage the asset in response for a fixed fee.
Returns for property funds are comparable to stocks, where investors expand both in terms of dividends in addition to a capital gain - or loss - from changes in the cost of the unit trust.
Paramet Tongbua, head of equity research at Tisco Securities, said property funds put forward better security and less unpredictability than investing in a property stock.
Dividend capitulates for most property funds now vary from 8-9%, well outpacing bank deposits and coming with less danger than investing in shares of a property company, he said.
"Certain funds put forward fixed rate returns for a fixed period, subsequent to which, dividends depend on the working results," Mr Paramet said.
Although investors who subscribed to the primary offer of the fund have observed the value of CTARAF go down to just 9.25 baht per unit compared with its 10 baht par value, payable in part to investor apprehension about the health of the tourism sector.
Mr Paramet said investors should think about how market developments might influence various segments of the property market.
Mr Paramet said the Ticon Property Fund (TFUND) give the impression of being better balanced than others in the present market, as its spotlight on industrial estates meant less unpredictability than other property classes.
Labels: apartments, property funds, residential homes
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