WHAT ADVISERS SAY

Adding another layer of diversification to your portfolio is always good, and that should be your main motivation for going into global listed property, Barry O’Mahony, the 2013 Financial Planner of the Year and founder of Veritas Wealth, says.

However, he says that listed property is closely correlated with interest rates: when rates rise, returns from listed property fall. Interest rates in much of the developed world – where most listed property funds are invested – have been artificially low, and, in part, your decision will depend on where you see these rates going in the near future. The widely held view is that US rates are likely to rise

Peter Hewett, the 2014 Financial Planner of the Year and the managing director of Efficient Advise, agrees that regional diversification is the main benefit of investing in global listed property.

He says the good returns in the sector should be seen in the context of the very low cost of financing property development. He believes that the yields from global property will fall slightly, because these costs will increase as interest rates rise.

Asset allocation decisions should always be based on your own circumstances, Hewett says. However, for the average investor who is saving for the long term, the rule of thumb is an exposure to listed property of between 15 and 25 percent, and, for the sake of diversification, Hewett says he would tilt the bias towards global (over local) property.