Managed Funds The life of a property fund

CFS Wholesale Colliers Geared Global Property Securities fund was launched in April 2007.

An investment of $10,000 at launch was worth $10,244 at its peak in June 2007.

From there it was all downhill until it finally bottomed in March 2009 where your initial investment of $10,000 was now worth ... $451 (that includes reinvested dividends!!)

That's more than a 95% drop in value.

Now that's where the fun started - if you picked up units then, you would have seen your money grow handsomely over the next few years.

By March 2013, that original $10,000 investment would be worth $5,617 - back up to half way towards recovering from the GFC falls.

It paused a while before resuming the growth and from 2017 through to early 2020 the fund saw great growth to the point where your original $10,000 invested in April 2007 would eventually show a profit by reaching a value of $10,026 on 17th Feb 2020 (assuming you reinvested all dividends!!).

But then COVID-19 hit and things started going badly for property securities - and as of the 18th March the value of that initial $10,000 investment is now back down to $3,558, and I really don't think we're anywhere near the bottom yet.

Not trying to make any particular point - I just thought it was interesting looking back at the history of this fund to see how it had performed since launch.

There were a lot of funds launched in those boom years leading up to the GFC. A lot of them didn't survive - but it's quite interesting to look at those that did.

 

I made some good money on this fund riding it on the way back up - but it is extremely volatile given its international exposure - there tends to be huge reactions to world events. I sold out in 2018 and so missed that last run, but I'm certainly in a better position now than if I had held!

Already down 65% as of Wednesday - and given the lock downs in many countries, lots of property securities are likely to struggle in the short term.

I also predict that this event may cause a change in approach for many companies once they work out that you can realistically have a large part of the workforce working from home - I see softer demand for office space moving forwards.