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Lawso
20-10-2006, 12:46 PM
Generally speaking I'm not into managed funds and I'm certainly not into direct property investment. But I've enjoyed pretty good gains from a couple of investments that combine elements of both, i.e. the listed property sector.

1. I went into Australian Unity's Property Securities Fund in 1999, choosing the Growth units, which means reinvesting the income. The fund invests in Aussie LPTs, such as Westfield and Stockland Trust. In 1999, when the Kiwi was worth only A83c, I put NZD12,000 into this fund. That got me 9287 units, then with a unit price of AUD1.05. Today, through reinvestment, I hold 15,367 units worth AUD2.269 each. This equates NZD39,750 or 3.3 times the original stake (despite a 5cps currency loss).

2. I also went into Property for Industry in 1999, when the price was around 80c. Today it's 138c but the real gain has come from compounding. With dividends reinvested every quarter, my PFI stake has grown by a factor of 4.5.

All this with little or no effort on my part, and certainly with none of the hassles that so often go with rental property investment. And of course, in both cases, the gains from compounding are growing at an ever-increasing rate.

While I run a moderately active share portfolio, living with the market's unavoidable ups and downs, I'm a bit of a King Midas as I watch my pile of shekels grow through AU and PFI.