Its not that regular. It usually only occurs when property prices are collapsing. If prices were robust and sure to rise, the funds would be falling over themselves to refund savers, because there would be a massive queue of people waiting to buy them, at even higher prices.It's a regular enough occurrence. Property funds are actual buildings. While they hold a fair amount of cash, if there are a lot of withdrawals, they put a block or a 6 or 12 month moratorium on withdrawals. Otherwise they will be forced to sell buildings to satisfy redemptions. Ireland is a small country and all the big players know who owns what, so they will know if there's a forced sale which will drive the price down.
it's more like 2020 but thats not as sensationalist.This sounds like 2008 again, when pension funds blocked people looking to exit. Any opinions?
If prices were robust and sure to rise
2020, when we had a massive worldwide virus,which shut down the entire economy?it's more like 2020 but thats not as sensationalist.
i think the economy fared pretty well all things considered.2020, when we had a massive worldwide virus,which shut down the entire economy?
If its an economic repeat of that, without the virus bit, it will be pretty sensational.
Yep, the smart money is looking to invest at 1-2 % while inflation is running at 7-8%Are investers returning to cash?
Financial crises of '08, Brexit, Covid, now. That's regular enough in the context of investment funds.Its not that regular. It usually only occurs when property prices are collapsing. If prices were robust and sure to rise, the funds would be falling over themselves to refund savers, because there would be a massive queue of people waiting to buy them, at even higher prices.
Its a red flag, a big one.
As far as I can remember it wasn't locked for Brexit ?
My personal view is a fund which will occasionally/regularly lock in investors for several months isn't a fund I'll invest in. There's plenty of higher returning and vastly more diversified funds that will never do this.
If I was in the pension version of this - despite being told by not to panic I'd have already asked to swap my money to another fund .
Pension savers told not to panic about Irish Life property fund move
THE move by Irish Life to restrict withdrawals from a major property fund it runs should not be a cause for alarm for pension savers, a leading financial adviser said.www.independent.ie
You're effectively been told the unit price of the fund is going down - in that case - you always sell.
In 2008 they also tried to keep the pension version open but had no choice but to also lock them in after a week or two. They want to keep the pension version open because if those people do nothing then every month the fund gets extra contributions - which reduces the immediate pressure to sell properties.
That would be nice, it's simply not the case particularly in pension schemes where people signing up often just check what everyone else is doing and select the same set of funds. They don't care that much when it's a new pension because they're not investing a lump sum - it's money from future earnings.everyone investing in a fund will be aware of what can and cannot be done and make their investment decision on that basis.
Don't savvy investors either educate themselves on basic issues like the obvious relative illiquidity of property and property-based investments, or hire investment advisors to do so?That would be nice, it's simply not the case particularly in pension schemes where people signing up often just check what everyone else is doing and select the same set of funds. They don't care that much when it's a new pension because they're not investing a lump sum - it's money from future earnings.
In 2008 the IL property pension fund was only 2 years old (from what I can see on line).
I knew multiple people invested in that fund - at the time no one involved had experience in how that fund would be locked in a downturn - including the people managing and selling the fund.
There was a warning in the small print that at times there could be delays in liquidating your investment. Very few people interpreted that warning as meaning the pension company could lock the investment for months or indeed years if they need to.
People trying to actively manage their pension investments like that (like selling out of equities in a dip) is madness.That would be nice, it's simply not the case particularly in pension schemes where people signing up often just check what everyone else is doing and select the same set of funds. They don't care that much when it's a new pension because they're not investing a lump sum - it's money from future earnings.
In 2008 the IL property pension fund was only 2 years old (from what I can see on line).
I knew multiple people invested in that fund - at the time no one involved had experience in how that fund would be locked in a downturn - including the people managing and selling the fund. BTW the typical response of people trapped in the fund was when it was eventually unlocked was to give up and sell at the bottom - the despair phase of investing.
There was a warning in the small print that at times there could be delays in liquidating your investment. Very few people interpreted that warning as meaning the pension company could lock the investment for months or indeed years if they need to.
Nope, not in company pension schemes. There a pension scheme is offered - it'll usually have some 5-10% company contrib. which means everyone signs, if you're imagining for most people there's a lot of thought put into fund choice or deep reading of the factsheets, or advisors hired to help - then I'm sorry to disappoint you. They're not "savvy" investors - for new employees this might well be there first and only investment.Don't savvy investors either educate themselves on basic issues like the obvious relative illiquidity of property and property-based investments, or hire investment advisors to do so?
Isn't that what I said?Nope, not in company pension schemes. There a pension scheme is offered - it'll usually have some 5-10% company contrib. which means everyone signs, if you're imagining for most people there's a lot of thought put into fund choice or deep reading of the factsheets, or advisors hired to help - then I'm sorry to disappoint you. They're not "savvy" investors - for new employees this might well be there first and only investment.
True - but that wasn't what I meant. I'm talking only about this undiversified and illiquid fund at that instant in time.People trying to actively manage their pension investments like that (like selling out of equities in a dip) is madness.
The Pension fund trustees are supposed to do this - it's part of their remit