Manager's report - Second Quarter 2010 1 Firstly, an apology/explanation. The Fund’s unit price on any given dealing (the last business day of each month) is based on the previous month’s NAV. So, July ‘s unit price is based on June’s asset valuations. This means that the performance of the Fund’s assets in the Quarter ending June is not fully available to us until the end of July – hence the apparent delay in the 2nd Q report. 2 So what has that performance been? In a word, steady; 3 Some numbers: - Unit price over the last twelve months +5% (」0.86 to 」0.92)* - Unit price over this calendar year +2% (」0.90 to 」0.92) - Unit price over this 2nd Quarter +2% (」0.90 to 」0.92) *Source: CISX - for all unit prices of Fund, see http://www.cisx.com/listedsecurityNAVs.php?secclassID=2511 4 When we launched the Fund we intended / wanted it to be”low volatility”. We felt reasonably confident that, on the basis of our research going back to the 1970s, provided no undue risks were taken with gearing (more below) this should be achievable. For the first year or so (January 2007-Autumn 2008) this proved to be the case. The financial woes of the period Autumn 2008-Spring 2009 and then the rapid recovery in asset values of the period March 2009 – March 2010 challenged all previous assumptions and models as we saw big swings in prices of all asset classes. However we feel that Prime Central London residential property (PCL) is entering a period of normality now. This should be characterised by a return to trend capital growth, or close to it, of 7% p/a and rents rising in line with inflation (with perhaps a bit of above-inflation growth in the next year as rents catch – up capital values); 5 What is normality for PCL? It is worth reminding ourselves of the relative performance of PCL property versus other UK property asset classes in recent years: (A) Total Returns (Capital Gains/losses) to June 2010 3.5 years 5.5 years 10.5 years UK Commercial Property 15% (-34%) +19% (-15%) +69% (+5%) PCL S/W Flats** +12.5% (-5%) +39% (+12%) +94% (+40%) (B) Average p/a Capital Growth 20 years 10 years 5 years
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Manager's report - Second Quarter 2010€™s report - Second Quarter 2010 1 Firstly, ... 2008) this proved to be the case. The financial woes of the period Autumn 2008-Spring 2009
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Manager's report - Second Quarter 2010
1 Firstly, an apology/explanation. The Fund’s unit price on any given dealing (the last business day of
each month) is based on the previous month’s NAV. So, July ‘s unit price is based on June’s asset
valuations. This means that the performance of the Fund’s assets in the Quarter ending June is not fully
available to us until the end of July – hence the apparent delay in the 2nd Q report.
2 So what has that performance been? In a word, steady;
3 Some numbers:
- Unit price over the last twelve months +5% (£0.86 to £0.92)*
- Unit price over this calendar year +2% (£0.90 to £0.92)
- Unit price over this 2nd Quarter +2% (£0.90 to £0.92)