IPD Italy biannual property fund Index down by 2.3% in H1

The Italy biannual property fund Index published by global information provider IPD, recorded a total return of -2.3% in the first six months of 2012, with the annual figure at -4.8%.

In its second consecutive negative performance, the Index reported a negative difference of 350 bps compared to the same period last year.

The Index sample remained unchanged at 39 closed-ended domestic funds, accounting for a total NAV of just below €8bn, and assets under management at €13.4bn.

“These both show a contraction against the previous semester of 4.8% and 3.6% respectively. The number of institutional funds has increased to 17 funds with the inclusion of M DUE, whilst the retail fund Caravaggio has been dropped out of the sample following recent changes in the funds’ governance,” the company said.

Specialist funds were the worst performers with a six month return of 2.8%. Balanced funds on the other hand delivered -1.3%, the best result in this issue of the Index.
The sample is also split by investor type, with retail and institutional funds returning -2.0% and -2.6% respectively.

Italian funds negative returns compare to similar declining trends in most alternative investment options; equities delivered a -2.4% in the first half of 2012, although the yearly performance was -26.1%, and real estate stocks returned -1.0%, or -57.9% June to June.

Italian government bonds were the only asset class to fare in positive territory with a 10.4% total return.

“The results of the Index confirm the difficult economic and financial context Italy and Europe have been facing for the past few years. We have isolated two main trends in the domestic property funds market, which highlight how Italian fund managers are tackling the situation. Most of the funds are undergoing a marked de-leveraging process and there is evidence of some re-pricing as a number of funds prepare for the wind-up phase,” said Giancarlo Cucini, senior analyst at IPD.

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