News this past week
- Abe’s coalition wins a landslide victory in Japanese elections
- US payrolls show 287,000 jobs created in June
- Chinese inflation slows
- Health of Italian banking sector of increasing concern
- Government bond yields continue to decline
James Klempster, CFA of Momentum Global Investment Management shares his view:
About a month ago, I commented on the compromises that need to be made when investing in UK property, noting that “Open ended funds can invest in direct property but it is important to ensure that the liquidity of the vehicle is appropriate given the illiquidity of the underlying…this is why we saw so many daily dealing open ended funds have to gate or use other exceptional measures, as they experienced outflows post financial crisis.” Last week we unfortunately again experienced the problems posed by this liquidity mismatch as a number of market leading open ended ‘bricks and mortar’ property funds applied valuation adjustments and suspended redemptions as a consequence of substantial withdrawals as sentiment soured following the surprise vote to leave the European Union.