New asset class joins the A list

Global listed property has exploded in terms of financial adviser uptake despite being an asset class with less than three years in the retail market under its belt, according to the latest Wealth Insights Adviser Market Trends Report.

The survey of 890 advisers found that in the last six months, 59 per cent have placed client investments in global listed property, which followed shortly behind cash (67 per cent), fixed interest (73 per cent) and Australian listed property (84 per cent).

Not surprisingly, Australian and international equities scooped the highest percentage of adviser usage, totalling 97 per cent and 95 per cent, respectively.

Wealth Insights managing director Vanessa McMahon said the fact global listed property was already more popular than alternative investments, which only managed to attract 35 per cent of advisers in the last six months, highlighted how popular the relatively new asset class was.

“Most global listed property funds don’t yet have a three-year performance history, so the fact they are already attracting more money than hedge funds, which have been in the market longer, is highlighting that planners are still to embrace alternative investing,” she said.

Morningstar Australia head of research Anthony Serhan confirmed that global listed property had been swiftly adopted in the marketplace and attributed this to Australia’s love affair with property in general.

“Australian investors are very comfortable with the idea of property and have been very familiar with the Australian listed property market,” he said.

Serhan said investor enthusiasm had been matched by the significant number of fund managers launching global listed property funds in recent years.

“When we did our review of global listed property last year we covered about 15 strategies, which is a really big number,” he said.

According to Wealth Insights, the fund manager to achieve the highest percentage (20 per cent) of advisers using its global listed property fund is AMP Capital Investors, which offers the AMP Capital Investors Global Property Securities Fund.

The fund manager’s senior investment adviser, Richard Shields, is positive in terms of a medium to long-term outlook for the sector.

“There is still some interesting growth to come — we are yet to see property investors, particularly in Europe and the UK, really embrace listed property the way Australian and US investors have, so I think we will see some more of that,” he said.

“I think we will see a lot more property get listed in Asia and Europe and we will see a lot more real estate investment trusts.”