News & Commentary
Vanguard’s Property Securities Fund ‘Highly Recommended’ by Lonsec 30 Jul 10
Lonsec’s recent Australian Property Securities Funds Sector Review 2010 renewed Vanguard’s Australian Property Securities Index Fund’s ‘Highly Recommended’** rating – the only product in the sector to hold this rating from Lonsec.
Regarding Vanguard, Lonsec’s report states that:
’Lonsec believes that there is a strong argument for investing in a proven index fund, given the increased concentration of the Australian listed property securities sector. Vanguard is well placed to add value through the execution of its trades (minimising transaction costs), understanding capital flows and various risk optimisation techniques.”
Property investment offers a portfolio both income and growth characteristics – typically displaying lower risk than shares and providing long-term capital growth potential*.
While the sector experienced significant challenges during the recent market downturn, subsequent restructuring, deleveraging and recapitalisation of underlying REITs have realigned the sector closer to its traditional long-term risk and return characteristics.
The Vanguard Australian Property Securities index fund seeks to match the return of the S&P/ASX 300 A-REIT Accumulation Index, which offers a low cost method of accessing a portfolio of listed property securities across retail, office, industrial, tourism and infrastructure sectors.
The fund operates at a low wholesale management cost. Lonsec’s fund review of Vanguard's Property Securities Index Fund states that at 0.34 per cent per annum “the Fund’s MER is well below the peer group average”.
**The Lonsec Limited (“Lonsec”) ABN 56 061 751 102 rating (assigned March 2010) presented in this document is limited to “General Advice” and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update this document following publication. Lonsec receives a fee from the fund manager for rating the product(s) using comprehensive and objective criteria.
