July performance numbers suggest the record run from global and Australian listed property trusts (LPTs) could well be over with another month of poor performance.
LPTs continued their downward correction of the last three months in July, research house Morningstar said yesterday.
The Morningstar Wholesale Investment Trust Equity Australian Real Estate Index returned -4.63 per cent for the month.
“Negative returns from many property and share funds remind us about the perils of relying on one single asset class and reinforce the benefits of diversification,” Morningstar consultant Sallyanne Cook said.
The Morningstar Wholesale Investment Trust Equity Global Real Estate Index returned -6.03 per cent for the month of July to finish the quarter down 12.58 per cent.
It wiped out much of the year-to-date gains in the sector.
The research house said concerns about the United States economy, along with continued woes from the sub-prime mortgage sector, weighed heavily on most share markets during July.
The Morningstar Wholesale Investment Trust Equity World Large Blend Index posted a return of -2.87 per cent for the month.
“All in all, not a great start to the new financial year, but a wake-up call for investors that they shouldn’t take double-digit returns from share markets for granted,” Cook said.
However, Asia and emerging markets continued to buck the trend.
The Morningstar Wholesale Investment Trust Equity Asia Pacific ex-Japan Index produced a 6.06 per cent return for the month.
It was up 16 per cent for the three months to 31 July 2007.
