Real estate fund with a focus on Germany
Investors who primarily want to benefit from the German real estate market have a large selection of open-ended real estate funds. And the German real estate market is interesting for investors around the world, like that Trend barometer real estate investment market 2018 of Ernst & Young Real Estate GmbH. According to the auditing company, 94 percent of the investors surveyed stated that Germany is an attractive or very attractive location for a real estate investment. Even in a European comparison, the German market convinces investors. In a European comparison, Germany is “very attractive” for more than half of the investors surveyed.
A fund that – as the name suggests – focuses on the German real estate market is the Focus Living Germany of the capital management company IntReal International Real Estate (ISIN DE000A12BSB8/WKN A12BSB). The distributing fund of the subsidiary of Degussa Bank scores with a very good Scope rating of “a+”. In addition to purely residential real estate, the fund also invests in social and senior citizen real estate, office buildings and commercial real estate.
The volume of the Fokus Wohnen Deutschland fund is 814.1 million euros. In the past 36 months, the fund achieved an average annual performance of 2.04 percent. The distribution takes place annually. In the fact sheet of the capital investment company, Klaus Niewöhner-Pape, Managing Director of Industria Wohnen, defines the goal of the fund in more detail: “Focus Wohnen Deutschland strives to acquire buildings of good quality and residential complexes in an environment worth living in and to pursue a sustainable investment strategy.” recommends this fund for investors who want to invest their money for at least five years. The fund is significantly smaller than all other funds in our test – and only has 39 fund objects. In July 2018, the capital company of this fund does not offer any shares over the counter on the stock exchange, but investors continue to receive them despite this cash stop. With this fund, investors must allow for annual running costs of 1.55 percent (TER) and a front-end load of 5.00 percent.
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According to the fund management, UniImmoDeutschland from UnionInvestment (ISIN DE0009805507/WKN 980550) is only suitable for investors who want to invest their money for the long term (more than four years). If you choose this real estate fund, you also pay a front-end load of 5.00 percent and have to reckon with running costs (TER) of 0.93 percent per year. Despite its focus on Germany, the UnionInvestment fund does not only invest in the German real estate market. A little more than 40 percent of the fund properties are located in the EU or in the European currency area. Just over half of real estate assets are invested in office buildings. In the Scope rating, the real estate fund from UnionInvestment comes off only slightly worse than the fund from IntReal and receives a rating of “a” – its return is above the expected return on comparable portfolios. The fund has a fund volume of 14 billion euros and is significantly larger than the Focus Living Germany fund.
The two mentioned real estate funds with a focus on Germany are the cheapest in terms of TER in our entire test. The Wertgrund WohnSelect D from the capital investment company Pramerica Property Investment is somewhat more expensive. It received an “a+” rating from Scope – incidentally, this is the highest rating in the real estate fund category. However, there is currently a cash stop for the WohnSelect D value reason, which means that the fund management is no longer accepting any new investment money. So why don’t we want to withhold this fund from you? It is the best residential-focused fund on the market. You can also continue to purchase fund shares in WohnSelect D via the stock exchange. The running costs (TER) are 7.20 percent per year. In addition, investors pay a sales charge of 5.00 percent and a performance-related commission. The fund’s performance speaks for itself: between June 2015 and June 2018, the fund posted an average annual performance of over 11.80 percent. The fund volume is 243.75 million euros and the fund is invested in a total of 14 existing residential properties.