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Any idea why Morningstar is 'Avoid'ing Colliers Intl. Property?

Discussion in 'Managed Funds & Index Funds' started by pinkeye, 1st Nov, 2007.

  1. pinkeye

    pinkeye Active Member

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    I noticed that Morningstar recommendation for Colliers Intl. Property Fund is 'avoid', but not sure why. It looks like it's doing well now! Any ideas...?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Not sure exactly how Morningstar came up with their rating (I haven't read their report), but global property has been hit badly this year by sub-prime jitters.

    The fund has picked up a bit lately, but is still trading below its 200 day average.

    [chart=CF;FSF0666AU;lasty;mav;20071031]Colonial First State Colliers Global Property Securities[/chart]
     
  3. pinkeye

    pinkeye Active Member

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    But... surely that suggests that it could be a *good* time to buy it...? :confused: :D
     
  4. Compleks

    Compleks Well-Known Member

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    Does the geared version of this fund trade in exactly the same way?
    (obviously with the exception of the effects that gearing a fund would have)

    Meaning, do they make all the same 'moves' (trades) as the non geared fund?
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    It depends on your strategy.

    If you are a buy-and-hold-forever kind of person, then you won't be that concerned about short term negative returns ... and buying when the fund is down might be good.

    Personally, I don't like to buy into a fund that is trending down - who knows how low it will go before it recovers ? The opportunity cost of having capital sitting there being eroded away is pretty high ... especially with borrowed money.
     
  6. Tropo

    Tropo Well-Known Member

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    Where did you get this idea from ??? :eek:
    Why would you buy something which is moving down? :confused:
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    No idea. I would imagine that it does invest in the same underlying fund (which is what actually purchases the shares) - they just add a gearing layer over the top.

    Speaking of downtrends: :eek:

    [chart=CF;FSF0877AU;lasty;mav;20071031]Colonial First State Colliers Geared Global Property Securities[/chart]
     
  8. Compleks

    Compleks Well-Known Member

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    Don't remind me :(

    Can someone hold me close and reassure me that the geared colliers fund was a good investment.
     
    Last edited by a moderator: 1st Nov, 2007
  9. crc_error

    crc_error The Rule of 72

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    Long term Global property had the highest returns of 15% PA out of all the asset classes... so I wouldn't be to worried about short term down movement. (according to the ASX Russel Report)

    Since you should be regularly contributing into your portfolio, then your entry price will be dollar cost averaged down.

    I'm holding onto my global property exposure.. with the US driving down interest rates, this will only boost property prices.

    There is a old saying 'buy where there is blood in the streets' No point in trying to compete with everyone else once it comes back into flavor.

    You had a 5 year+ view on this investment, so lets keep it this way..
     
  10. Compleks

    Compleks Well-Known Member

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    haha, thanks mate. I wasn't entirely serious.

    I'm not too fussed with the current downturn, since as you said, I'm in it for the long term.

    I'm pretty confident that the property market will continue to perform well as a long term investment.
     
  11. crc_error

    crc_error The Rule of 72

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    now your talking :D Anyway your 452 fund is kicking ass, so its all about swings and round abouts! who knows, in 12 months time, the 452 fund will lag, and the colliers will kick butt! thats why you diversify, so smooth out the ride.