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Australian Unity Property securities growth

Discussion in 'Managed Funds & Index Funds' started by tony, 12th Dec, 2007.

  1. tony

    tony Well-Known Member

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    Hi

    Several months ago there were several posts regarding Australian Unity Property Securities Growth - most of them critical about the lack of information from Australian Unity regarding the sudden drop in unit price and the no reasons provided for closing the fund.

    Australian Unity continue to excel in this area and one wonders about the calibre of the managers.

    The latest Morningstar ranking on returns shows that the Growth fund rated bottom of 119 similar funds - 119/119.

    The returns for the past 12 months are negative with whopping losses in the last 6 months.

    Yet still nothing by way of explanation from Australian Unity.

    I'm certainly not hanging around for 5-7 years to see whether they will achieve benchmark performance - I know the answer now.

    I think I know why they closed the Securities fund/s - open up a rebadged fund every couple of years and you don't have to show a dismal track record.

    Tony

    PS I had $100k in this fund - its now considerably less.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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  3. tony

    tony Well-Known Member

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    Hi

    Thanks. I thought I was being too cynical but from reading the article it would make sense that if you have ranked, like Australian Unity Property Securities Growth, as 119/119 then you would want to close the fund to new investors and start over with another fund.

    But even if you are the worst fund manager out of 119, that still doesn't explain the complete indifference to providing an explanation for the continued poor performance.

    Unless they are complete idiots. Mmmmh !

    Tony
     
  4. Tropo

    Tropo Well-Known Member

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    "But even if you are the worst fund manager out of 119, that still doesn't explain the complete indifference to providing an explanation for the continued poor performance.

    Unless they are complete idiots. Mmmmh !

    Tony"



    Tony,
    I would not be surprised if they short bullish market.:eek:
    On the contrary they may go long in bearish market. :confused:
    You can not win with ****** (them) ;)
     
  5. lorrimer

    lorrimer Well-Known Member

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    I'm in the same boat as you Tony. Invested 100K about a year ago.
    Didn't realise it was performing that badly. I had one large distribution, so probably down around 9k on holding costs overall.
    Did you notice a few weeks ago the unit price dropped overnight from 2.45 to around 2.18?
    It seems to be moving up a little recently, however I think I'll take the opportunity to reduce my LVR and bail out.
    Can anyone tell me the Tax implications for selling now at a loss? Can I use this loss to reduce my tax bill in this current tax year?
    Thanks
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Generally you can only use capital losses to offset future capital gains, not regular income ?
     
  7. tony

    tony Well-Known Member

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    Hi

    I know it may look as if I'm beating up on Australian Unity Property Securities Growth - but seriously ..

    Yesterdays SMH shows Property Securities Growth as 24.57% for the past 12 months. The same figure is shown in yesterdays (Wed 12/12/2007) Australian Financial Review listing of managed funds.

    On that basis one would be queueing up to invest funds with them.

    Even the Australian Unity website shows performance figures for Property Securities Growth at 6.41% for last 3 months, 8.42% for last 6 months, and 27.87% for last 12 months. The performance table is shown as at 30 November 2007.

    Except Morningstar show the real figures: -8.08 for the last 3 months, and
    .97% for the last 12 months, with a deserved rating of 119 out of 119 for performance.

    An absolute contender for "Dog of the Year".

    Personally I think it's deceptive and misleading of Australian Unity not to provide updated figure to their website, and thereby to newspapers relying on such figures.

    Fortunately the fund is "closed to new investors" therefore no-one can say that they invested relying upon such false and misleading figures, but seriously what does that say about ethical behaviour.

    Tony
     
  8. crc_error

    crc_error The Rule of 72

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    Unfortunatly all LPT funds have had a poor performance over the last 12 months.. not just Australian Unity.. not sticking up for them, but just highliting the fact.

    This is why its important to diversfy..

    Plus if I recall AU was a very volatile fund anyway..
     
  9. tony

    tony Well-Known Member

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    Hi

    True, some LPT's have had a poor year but the point I'm making is to be ranked 119 out of 119, together with the corresponding lack of accurate performance disclosure, or the misleading performance disclosure, by the fund provider.

    I'm not whacking them because they got it wrong monumentally in their stock selection but because they continue to show on their website that everything is sweet with annual returns of upper 20%.

    Am I missing something here - is it misleading/ deceptive or what ?

    Check it out - don't take my word for it.

    My earlier post implied it may not be criminal (because the fund is closed to new entrants) but it is ethical - hardly !!.

    I've done my dough with them - I'm only trying to alert some newbie from doing what I did - buying-in on the basis of misleading past performance.

    Fincorp and others where posting great returns before they went under.

    Tony
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Even if the performance figures are accurate - they can still be misleading ... long term rolling averages keep a fund looking good long after a single stellar year ... I got burned by this with Platinum Japan, and it wasn't until I started looking at the actual annual performance figures and also charting the performance that I really saw what was going on ... hence why I developed my Compare Funds site.

    Of course, Australian Unity don't publish full historic unit price details (that I can find anyway), so I we can't analyse them anyway :(
     
  11. coopranos

    coopranos Well-Known Member

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    Unfortunately thats what happens when you chase the big returns - I noticed they were on the top of the investsmart top performing funds chart for ages. If you had owned units in the fund a couple of years ago you would have had a solid ride up, and would still be well ahead, but you (like many I would imagine) jumped on board the gravy train.
    Personally I think the problem is that their own success kills them, you see it happen a bit, the fund starts off small and makes stellar gains, everyone sees 40% returns and jumps in, all of a sudden the fund managers are in a different league and are playing a different game to that which they initially played.
    I'm not being hard on you, I had chucked a small amount in with them ages ago. I got very wary because of the constant promise of more online accessability, and managed to bail with a tiny profit.
    I guess the lesson is if you want to chase the big returns, do it with a very small % of your portfolio.
    Hopefully you only had a small amount allocated!
    To be fair though as has been said, the whole sector has copped a hiding. According to a Eureka Report article I saw they expect it to be a rough ride for a few years in that sector
     
  12. lorrimer

    lorrimer Well-Known Member

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    Just looking through the figures, the 6 mth return of 8% includes a large 16% distribution paid in July. So although they quote a positive return, it's actually a -8% return plus the 16% distribution.
     
  13. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    If they are distributing large amounts of cash (larger than usual) - it usually indicates that they sold an unlisted asset - huge capital gains hit.

    That's fairly normal for a property securities fund which invests in listed and unlisted property trusts and indeed in direct property too ... but it's still not ideal given the tax implications for unit holders.

    I know Colonial/Colliers was in a similar situation earlier this year - and they made a special distribution in April (I think) - their argument was that they didn't want to penalise unitholders who bought in between April and June with a large capital gains hit from a transaction that happened before they invested. That's a fair way to do things in my opinion (I'm not sure when AU distributed or whether this was actually the case in their situation - I'm just speculating).
     
  14. tony

    tony Well-Known Member

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    Hi

    I suspect that given the bad news today in the AFR (page 68) about Centro, and the fact that AU Property Securities Growth holds a large portion of Centro, will mean another month of negative returns for AU.

    And in the same way that Centro has suspended trading ("as new loan facilities were being negotiated"), so I suspect that is the reason why AU Property Securites has closed to investors.

    A classic domino effect (or is it a ripple effect ?).

    As previously mentioned I don't blame AU for the problems with their stock selection - but I do think they are less than truthful by disclosing favourable figures to end of September on their website instead of the latest unfavourable (November YTD) figures.

    And I suggest that they should drop the word "Growth" from the name of the fund - it looks plain stupid when the only "growth" is backwards from being a large fund to a smaller fund.

    Tony
     
  15. lorrimer

    lorrimer Well-Known Member

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    Tony,
    Do you know what proportion of the portfolio is made up of Centro?
    I can't find any information regarding it's holdings in the PDS.
    I read on here that they also hold a lot of Stockland and that fortunately seems to be performing a little better.
    One thing I did discover by reading the latest PDS on their website is that the Growth fund re-opened to new investors on 12 December. Also an explanation as to why it was temporarily closed. So perhaps nothing to sinister about it after all. Let's hope not!
    Cheers
     
  16. transit

    transit Well-Known Member

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    Funny how this thread came along... i've just sent off a redemption form for this fund because i think the whole sector is flat. I bought these units in March 06 at 2.72 and they are now 2.34, that's about a 14% loss. Not too bad.

    Also just sent of redemption form for CFS Property Securities (APIR = FSF0251AU) which i bought in Sept 06 for 1.3270 and they are now 1.3350, a 0.60% gain!

    I took the biggest hit on CSF Colliers which i bought in March 06 paid 1.69 and they are now 1.29, a 23.8% loss.

    In hindsight the commercial property market was hot when i bought in. I think i'm better off taking a hit, cashing out and then putting the proceeds into asia and resources exposure which i still like the look of from my casual reading.
     
  17. tony

    tony Well-Known Member

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    wow !!

    what a difference a day makes. However I was pleased to read the optimism in Lorrimer's post.

    Hopefully AU Property Securities Growth is not such a dog after all - but I doubt it.

    Somehow I suspect that things are going to get a whole lot worse for AU.

    Thus, "Hope for the best, plan for the worst".

    Maybe tomorrow/ Wednesday is the time to buy cheap.

    Tony
     
  18. Cherry Pro

    Cherry Pro Active Member

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    My 15 y.o. has a regular savings plan with AU (Growth and Ordinary) and when I just called to find out the unit price, I was horrified to see his savings eroded.

    Like Coopranos suggested, I jumped on board the gravy train seeing that
    AU had been top of the charts for a while ... now to number 119, that is
    a shame !

    His is only a small amount - was $1790 on the 2nd of October and today
    down to $1637 (after deposits of $400).

    What are your suggestions - the lady I spoke to at AU said the fall
    was linked to the US sub prime losses and they're hoping to notify
    clients as soon as they have a clearer idea of their position.

    Should I redeem or wait out for a bit ?

    Thanks.
     
  19. samaka

    samaka Well-Known Member

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    I'd start investing in something else and leave the current amount where it is.
     
  20. coopranos

    coopranos Well-Known Member

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    Cherry Pro
    It is unfortunate that he is losing money, but also will teach him valuable lessons for the future.
    Investing carries with it risk, part of winning is losing.
    It will encourage him to make decisions based on some actual research, rather than looking on the investsmart top 12 month performers.
    It will also show him that over the long term making sound decisions should outperform chasing big returns.
    Personally I would bail on property for the moment if that is the only thing in the portfolio.
    You will very likely do much better out of a cheap index fund or perhaps one of the ishares - the lesson is about consistent savings and reinvestment of earnings is the key, not massive returns.