German funds remain in negative territory in June: IPD

German open-ended real estate funds returned -0.1% in June, repeating the weak performance of the previous month, according to the latest data from IPD Investment Property Databank in Wiesbaden.

IPD’s overall index of German open-ended funds, OFIX-ALL, covers 22 funds. The sub-index OFIX Germany, which incorporates those funds with at least 50% of real estate assets invested in Germany, performed significantly better than sub-indices for the European and global funds. OFIX Germany returned 0.2% in June and 0.5% over the second quarter of 2012, whereas the returns for the European and global funds were negative in both periods.

Over the past year, 12 of the 13 funds that are open for share redemptions achieved positive returns of between 0.3% and 5.3%, while funds in liquidation generated losses between -12.0% and -1.1% over the period.

‘The fact that all of those funds in liquidation performed worse than the weakest performing active fund once again shows that winding-up and declining returns go hand in hand,’ said Sebastian Gläsner, head of fund services at IPD in Wiesbaden.

The eight funds in liquidation account for EUR 21.5 bn in net asset value, just less than 29% of the total market of German open-ended real estate funds available to private investors.

Daniel Piazolo, managing director of IPD in Wiesbaden, added: ‘Over two-thirds of the market is not in crisis, either in terms of fund flows, or return trends. For investors in the funds being wound up however, the all-clear cannot be given, since the weak returns witnessed in previous months are still persisting.’