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New funds offer access to property companies not properties Back  
Irish investors looking to gain access to Eurozone property markets, without the hassle involved in actually buying a property, may be interested in two new funds recently launched on the market. AIB's European Property Stocks Fund and Eagle Star's Eurozone Property Fund invest in property companies rather than property itself, by tracking the European Public Real Estate Association Eurozone Index.
Aimed at both institutional and retail investors, two new funds, AIB’s European Property Stocks Fund and Eagle Star’s Eurozone Property Fund, offer investors a chance to invest in property companies, rather than property.
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Table 1: EPRA Eurozone Index - Sector Breakdown (%) (as at 31/12/2004)

The funds will track the performance of the European Public Real Estate Association (EPRA) Eurozone Index, which is an index on real estate created by the EPRA. EPRA is a common interest group, which aims to promote, develop and represent the European Public Real Estate sector. The EPRA Eurozone Index was launched in 2000. Containing approximately 100 public quoted real estate companies, the EPRA Eurozone Index has been designed to provide an objective and representative benchmark for the real estate industry in the eurozone.

By investing in the companies rather than the property itself, the fund overcomes some of the downsides to property investment, namely illiquidity and high entry / exit charges.

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Table 3: Top ten holdings in the EPRA Eurozone Index (%) (as at 31/12/2004)

The Eagle Star unit-linked Eurozone Property Fund currently invests in an investment vehicle called the Easy ETF EPRA Eurozone. This is an exchange traded fund (ETF) managed by AXA Investment Managers, designed to track the performance of the EPRA Eurozone Index. Eagle Star may use other vehicles in the future if it considers them to be more effective.

The European Property Stocks Fund is a sub-fund of AIB Select Portfolio. It is a unit trust where investors subscribe for units and their subscription monies are pooled together and used to purchase shares in listed UK and European property companies. The objective of the fund is to achieve capital appreciation through stock price appreciation and re-investment of dividends by investing in a diversified portfolio of listed property companies.

Minimum investment in the AIB fund is €10,000 and €5,000 for the Eagle Star Fund.

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