AMP and Nikko Securities have launched a global property securities fund for the Japanese retail mar...
AMP and Nikko Securities have launched a global property securities fund for the Japanese retail market aiming to yield 4% after taxes and fees.
The Nikko AMP World Reit fund will invest in real estate investment trusts around the world and aim for a gross yield of 7%. An expected 50% of the assets will be invested in US Reits - the world's largest market, 35% in Australia and 15% in Europe, split between the Netherlands, Belgium and France.
Demand has been strong with E260m being raised in the first few weeks through financial advisers and by Nikko's tied distribution.
Patrick Sumner, director of property, public markets Europe at Henderson Global Investors, which is subadvising AMP after being demerged from the Australian giant last year, said the fund would be unhedged for currency risks. The fund will distribute income each month, therefore acting as a retail savings scheme.
Sumner said: 'Reits are expensive under old models but a valuation shift is taking place as there are few alternatives for investors wanting yield, for Japanese savers base rates are effectively zero, and the demographics mean people want yields as they retire.
'Investors are looking outside of Japanese Reits as it is an awful local market and they are more confident about foreign markets. It is a purple patch at the moment.'
£1bn business since inception
Considered doing so in 2015
Client communication considerations
Aviva: ‘We are sorry’
FOI from Professional Adviser