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Best Managed Fund for Income?

Discussion in 'Managed Funds & Index Funds' started by Norak Bastiat, 1st Jan, 2009.

  1. Norak Bastiat

    Norak Bastiat Well-Known Member

    Joined:
    16th Sep, 2007
    Posts:
    66
    Location:
    Melbourne
    I am looking for a managed fund that provides high reliable yields. Property funds tend to have high distributions. What do people think about the APN Property for Income Fund? What about Vanguard's Property Fund?

    The returns on the APN fund seem high (11% per year or so), so should I be worried that maybe something dishonest is happening?
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Norak,

    Check out the Zurich Equity Income Fund Zurich Financial Services - Investment products

    Around 10% pa based on buying shares and investing for the franked income and also sells options to limit downside with the share market to generate additional income. Beta is approx 0.6, so if the sharemarket moves up 10% the fund moves up 6% and likewise on the downside, sharemarket drops 10%, fund drops 6%.

    The APN fund all applications and withdrawals have been suspended see Fund Document issued 24th October 2008, so you might have issues trying to invest with them.

    For the Property index, maybe good prices? It's hard to tell whether there are more drops in the LPT market. At around 7% (no franking) it's looking healthier than term deposits but obviously not government guaranteed. Maybe others in the forum have a specific view on the LPT sector?

    Cheers,

    Dan

    PS This is general information. Before making an investment decision speak to your FPA registered Financial Planner.
     
  3. Andrew Newman

    Andrew Newman Well-Known Member

    Joined:
    5th Nov, 2008
    Posts:
    175
    Location:
    Melbourne
    Hi Norak,

    There are many property funds that would seem to be paying high yeilds. However, this is because the values of the underlying property investments have fallen.

    Cash is the least risky but the potential for high returns over the long-term compared with other asset sectors is relatively low.

    Share funds will generally deliver the highest return over the medium to long-term, however, they also exhibit the highest fluctuations in values in the short term.

    Importantly, you need to decide on the level of risk you are comfortable with before deciding what type of investment you wish to proceed with.

    Always look at the risks before potential returns, as most investors can stomach low returns but few investors can stomach negative returns.