Is this the right time to purchase those beaten down open-ended property funds?
Spend mere 70p to get £1 worth of assets plus a decent yield. Could this be a tempting punt for bold investors, or is it still too early?
Savvy investors can often make a killing by opting to go against the herd mentality. This is the reason why the contrarian approach may open up a paying path for some good opportunities in the beaten down commercial property segment.
Commercial property funds have crumbled sharply in value, and many panicky investors are in a hurry to exit them.
However, a section of experts claim that now is an ideal time to purchase one of those open-ended property funds like a unit trust.
The share prices of most investment trusts and some real estate investment trusts (Reits) are tumbling. The fall has been so steep that many of them are priced at considerable discounts to the underlying assets’ net value - 30 per cent or higher.
To put it in other words, you’re paying 70p for owning every £1 of assets. Could this be construed as a perfect buying opportunity for those contrarian investors who always look to go against the prevailing market sentiment?
Anthony Bolton, Fidelity’s former star fund manager, is one of those major contrarians. He feels that attractive bargains are available for a gainful entry into heavily tumbled British property stocks.
According to Bolton, the opportunity has been made available owing to the sell-off of listed property firms that looks overdone.