Spotlight on APN Property for Income funds
4 key benefits of remaining invested
APN Property for Income Fund and APN Property for Income Fund No. 2 (Funds) are two of Australia’s leading property securities funds. Whilst investors may be understandably disappointed with the illiquid status of these funds, it’s important to keep in mind the benefits of remaining invested.
1. Monthly income
Monthly distributions continue to be paid. And as payout ratios of the trusts in which the funds are invested gradually step up, distributions may also increase over time.
- APN Property for Income Fund – delivered 8.35% pa income since inception1 to 31 Jan 2011
- APN Property for Income Fund No.2 – delivered 7.35% pa income since inception2 to 31 Jan 2011
2. Lower than market risk
Not only have the Funds outperformed the Index, importantly, they have done so at much lower volatility than the market.
3. Opportunity for growth
As property valuations have troughed, the all-important fundamentals are supportive of upside potential for capital growth.
4. Playing it safer
After an extraordinary period of global financial market upheaval, AREITs have restored their balance sheets and scaled back riskier style earnings. AREITs have returned to their traditional defensive asset style: lower risk, low growth income investments that rely on regular income streams from the rent collected on commercial property. We see this return to basics (and lower risk structure) as a very positive sign.
Gradual return to business as usual
We continue working hard to manage the funds back to “business as usual” by reducing the unlisted portion of the Funds to less than 20%. When the real estate market stabilises and optimal asset allocations and cash flows return, normal application and redemption procedures are expected to be restored.
APN would like to thank you for your ongoing support of the Funds. Whilst the suspension of redemptions is far from ideal, we encourage you to consider the benefits of remaining invested. We expect to see AREITs emerge as a solid performer in 2011 as the healing process continues, macroeconomic conditions strengthen and the underlying property fundamentals steadily improve. We remain confident that the Funds will achieve their investment objectives over the long term and hold a compelling place within a diversified investment portfolio.
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| Fund inception 28 August 1998 |
Fund inception 6 June 2005