... to all our readers, as we are taking a break for Christmas, but hopefully will see you back here next year for a happy, healthy and wealthy New Year.
Finally for this year I'll leave you with the last two Advent Calendar windows to say Happy Christmas!
In the past i have toyed with the idea of holiday let and buy to let properties but in the end I decided it was less hassle and may be more lucrative to invest in the stock market. It also struck me that maybe student lets would also be a good idea with the steady flow of tenants and a captive audience as it were. I was therefore interested to read recently that record numbers of students entered university this year (despite the higher fees). But if, like me, you don't want the hassle of dealing with agents, property maintenance and tenants then you might be interested to know that there are ways you can invest in student property via listed vehicles in the UK. I've come across two, although there may be more.
The first is called Empiric Student Property (ESP) which listed earlier this year. They provide a home for over 650 students in 8 properties across 6 of the UK's strongest university cities. A further two development properties and one forward-funded property will provide an additional c.430 beds. They are targeting a net total return to shareholders of 13.0% p.a. over the medium term, including a 6.0% p.a. dividend yield. It is not far above the issue price and still quite close to NAV unlike some other property funds.
The second one has been listed slightly longer and is called GCP Student Living which has the great ticker of DIGS. The Company’s investment objective is to provide Shareholders with regular, sustainable, long-term dividends coupled with the potential for modest capital appreciation over the long term and RPI inflation-linked income characteristics. It has been listed slightly longer than ESP and in a recent IMS they said:
"The Company achieved an annualised total return of 11.5% to 30 June 2014, exceeding the Company's annualised target return of 8.0-10.0% per annum. The Company's target 5.5% annualised dividend yield in respect of the period to 30 June 2014 was achieved with a total dividend of 6.10 pence per share paid to shareholders in respect of the period."
This one has moved onto more of a premium than ESP with the current share price trading around 10% above its September NAV according to their website, which you can visit by clicking the highlighted name link above.
So there you go a couple ways to play student accommodation for you to study if that appeals to you. Meanwhile see today's Advent Calendar to see some tenants you wouldn't want to deal with.
I mentioned in my posts this weekend hedge funds in relation to the stronger US Dollar and also when I reviewed Man Group the hedge fund manager. In passing I suggested that the current market conditions could be more favourable for global macro type hedge funds which have had a tough time of it in recent years and provided fairly dull returns, although they did well in the years running up to and over the financial crisis.
The problem for individual investors is that hedge funds, if you want to invest in them, are generally only open to high net worth individuals / mega rich. However, there have been a few funds listed on the London Stock Exchange over the years which offer access to these strategies in a listed, easily traded vehicle. These tend to act as feeder funds to their larger unlisted funds.
One such fund define their Macro Strategies as follows:
"Macro": multi-asset global markets, mainly directional (for the Fund, the majority of risk in this category is in rates)
"Rates": developed interest rates markets
"FX": global FX forwards and options
"EMG": global emerging markets
"Equity": global equity markets including indices and other derivatives
"Commodity": liquid commodity futures and options
"Credit": corporate and asset-backed indices, bonds and CDS
"Systematic": rules-based futures trading
"Discount Management": buyback activity for discount management purposes
Summary & Conclusion
This is just a thought that with the recent macro moves and after such a strong performance in conventional asset classes, this could be a reasonable time to consider diversifying into something that may not be as correlated and which could do well if other traditional assets start to struggle or fall. Given the performance in recent years they have also drifted onto a small discount.
If that is of interest you can open today's Advent Calendar Window to learn more about an example of this type of fund, but once again it is just a suggestion and not a recommendation and the past is no guide to the future and investments will go up and down.
As you may or may not have noticed the US dollar has been quite strong recently and so what you might think. Well earlier in the year there were concerns and companies reporting hits from the strength of Sterling. So now those with dollar earnings should have seen some respite and maybe even some benefit now depending on if they use average or period end rates.
Apart from the effects on overseas earners in the UK it also has potentially serious implications for the global economy and some emerging markets in particular. So I thought I would share with you some of the more interesting pieces that I saw on this recently. First up I had the last free version (shame) of Things that make you go hmm... by Grant Williams via Mauldin Economics. If you enjoy it, it does include a sign up option for when the paid for service launches, otherwise see page 6 for the summary and page 25 for the full piece about the dollar.
Second was the always entertaining and slightly controversial Market Oracle with his latest views on the $ and "other" things. Click the highlighted links above to read these if you want to and don't forget to open today's Advent Calendar window for some more dodgy music and a bizarre video from my youth, the clue is in the title again today, 2 points if you can name the band.