Hibernian UK Property - Any hope in the mid term?

B

Butch

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Hi All,

I am managing (through a financial advisor) a ~€100K portfolio, with monies invested around January and October 2006 in several moderate risk equity-based and equity-property mixed funds (Evergreen, Eagle Star 5x5, Hibernian Guaranteed, etc).

My investment horizon was 5 to 7 years and expectations was to moderately beat deposit rates. My attitude to risk is moderate. As with many of us, the last months were not particularly brilliant. Yet, I am not cutting loses and I stick to my original plan waiting for a recovery.

Question: Some 20K of my the portfolio is in the Hibernian UK Property Fund (not geared), which dropped significantly following a revaluation of the fund. As of now, I lost 20% of the original investment. I don't see the UK market recovering any time soon (definitely not within my 5-7 year horizon) and I am considering moving this money to a different product within Hibernian, probably a high yield fund. I realise I am cutting my loses with this move, but I hope this move would help recover this (bad?) investment.

Any different opinion? Is there any point is leaving the money invested in this particular fund?

Thanks,
Butch
 
If you are rational about this you should be concerned only with the performance of your overall portfolio and not with its individual components. So first you should check if your portfolio has significantly underperformed major stock market indices or any other comparable benchmark. If it has, you’ve potentially a problem with your asset allocation so it might be prudent to raise that with your adviser. If your portfolio has declined in value but by about the same as everyone else’s, you’re just in the same boat as the rest of us. As for swapping one financial product in your portfolio for another, only you or your financial adviser can answer this question, as the effect it will have on your overall portfolio performance (i.e. its return and volatility) depends not only on the weigh of the product in your portfolio and also on its covariance with the other financial products in which you’ve invested.

(By the way, I’ve also invested in the Hibernian UK commercial property product and I would not disagree with your assessment that it will not recover any time soon, it also may well decline further in the short term; but I think these unitized property funds in any event require a long investment horizon. If might be more profitable to see where you can channel new investments rather than looking for a ‘quick fix’ for the poor performance of this product.)
 
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