UK pooled property funds have delivered a 22.9% annual total return in the 12 months to the end of the second quarter, according to the IPD UK Pooled Property Fund Indices (PPFI).
The result compares with a 23.9% return on direct markets.
IPD said the indirect fund performance represents the second-highest rolling annual return to June in the past 10 years, behind the 24.7% delivered over the 12 months to Q2 2006 – at the height of the property bull market.
Over the 12 months to June, specialist funds, which apply higher levels of leverage, delivered 28.8%, outperforming the direct market by almost 500 basis points, while balanced funds returned almost 10 percentage points lower than specialist funds, at 19.0%.
“Specialist funds have comfortably outperformed the main market over the last 12 months, driven by successfully-applied focused strategies as well as by the positive impact leverage can have in rising markets,” said Cameron McVean, head of Fund Indices at IPD.
In the second quarter, UK pooled property funds delivered a 3.4% total return to June 2010.
This compares with a 5.9% return recorded in the first quarter of the year.
Balanced and specialist funds delivered 3.1% and 4.0%, respectively during the quarter.
Across the 60-strong fund constituents, all but two funds delivered a positive return for the quarter ranging from -3.9% to 10.7%.
nathan.cross@estatesgazette.com
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