Unlisted property improves portfolio returns

New survey findings

Alice Uribe

Mon 25 Aug 2008

Implemented consultants have been increasingly using unlisted property and alternative assets to improve the risk and returns of portfolios, according to the latest analysis by Deloitte Actuaries and Consultants.

The Deloitte survey found that in a year in which most balanced funds delivered their first negative return in five years, several consultants reconsidered the asset allocations of their balanced funds and achieved better return incomes.

"We did expect consultants with a higher exposure to unlisted property to outperform their peers, but going forward we also need to remind ourselves of the risks associated with such investments," Deloitte director Michael Gonserall said.

Given the unlisted property index outperformed the listed index by over 50 per cent last year, there is the possibility of a lag effect, with unlisted property tipping to decline in value, he said.

"The question looking ahead for investors is whether Australian unlisted property will suffer a similar decline in value as Australian listed property has over recent times."

The survey found that the average balanced fund return for the year ended June 30, 2008 was -9.7 per cent compared to the five-year return of 10.6 per cent per annum.