Research house Lonsec has awarded its highest rating of “highly recommended” to products made by ING and Vanguard following a review of the Australian property securities funds sector.
The ING Wholesale Property Securities Trust and Vanguard Wholesale Property Securities Index Fund won the top award.
“ING have demonstrated that they have sound research capabilities, a logical and robust investment process and also have had a stable team over the last couple of years and we feel this has led to the outperformance of the fund,” Lonsec property investment analyst Thembi Matabiswana said.
“Vanguard is a low fee index option. The [Australian] sector has become really concentrated with Westfield becoming a larger portion of the index and hence it’s difficult for active managers to add value over the long term.
“Hence we gave Vanguard highly recommended.”
The ING Wholesale Property Securities Trust lost 5 per cent each year in the five years to 31 July 2009, trumping the S&P/ASX 300 A-REIT Accumulation Index’s 8.7 per cent annualised decline in the same period.
The Vanguard Wholesale Property Securities Index Fund slipped 8.41 per cent each year in the five years to 31 July 2009.
Lonsec also added three funds to its Australian property securities universe during the review, in order to provide investors with a broader range of investment products.
The newly-added funds include the EQT SGH Wholesale Property Income Fund, the Cromwell Phoenix Property Securities Fund and the Resolution Capital Core Plus Property Securities Fund.
The overall review encompassed 19 funds.
While the S&P/ASX 300 A-REIT Accumulation Index has plunged a disappointing 37 per cent over the 12 months to July 2009, there has been a re-rating of securities within the sector since March, Matabiswana said.
“While ‘safe haven’ A-REITS had been the best performing in the previous quarters, a number of small, more highly-geared A-REITS such as Goodman Group, GPT and Macquarie Countrywide have bounced back strongly since 10 March,” she said.
“This has largely been driven by investors increasing their risk appetite.”
