UBS Trumbull Property Fund Review of Performance and Fund Issues

The UBS Trumbull Property Fund has had its fair share of ups and downs. The fund's performance has been affected by various issues, including a significant decline in value due to the global financial crisis.

The fund's net asset value (NAV) plummeted by 75% between 2007 and 2008. This drastic decline was largely attributed to the fund's heavy exposure to commercial property in the UK.

Investors in the fund were left reeling from the losses, with some facing significant reductions in their retirement savings.

The UBS Trumbull Property Fund has had a performance of -1.24% in the current year, which is a decline from its previous performance. This is a significant drop, especially considering the fund's overall performance since inception, which stands at 22.36%.

The fund's high point in the past year was 163.34%, a notable increase from its low point of 155.76%. However, this high point was also accompanied by a maximum loss of -3.96%, indicating a volatile performance.

The fund's performance can be broken down into various time periods, with the 1-year performance being -1.24%, 3-year performance being -7.89%, and 5-year performance being -3.19%. This shows a decline in performance over time, with the 5-year performance being the lowest.

Here's a summary of the fund's performance metrics:

The fund's performance has been impacted by various factors, including its risk-adjusted return, which has been -5.88% over the past 3 years and -3.19% over the past 5 years. These numbers indicate that the fund has not been able to generate returns that are in line with its risk level, leading to a decline in its overall performance.

The UBS Trumbull Property Fund is facing significant issues, including a massive $7 billion redemption queue. This is a major concern for investors, as it can lead to a host of problems for the fund.

Investors have been leaving the fund in recent years, with notable departures including the Nebraska Investment Council, which managed $167 million in investments, and the Chicago Teachers' Pension Fund. These investors are likely concerned about the fund's exposure to retail real estate, which has driven down returns.

One of the main issues with the fund is its underperformance compared to industry benchmarks. Over the last five years, the fund has generated returns of around 8%, while other funds of its size have achieved 10% or more. This has made it a less attractive option for investors.

The fund's underperformance has been a long-term issue, with the Nebraska Investment Council adviser, Townsend Group, recommending that the state's pension and retirement funds exit the fund due to its poor performance. This decision was likely influenced by the decline in retail property values, which has lowered returns for the fund.

To try and stem the flow of redemptions, UBS has offered to cut costs for investors willing to stay in the fund and to forego management fees for new investments. However, it's unclear how effective these measures will be in persuading investors to stay.

Here are some key statistics on the fund's performance:

These statistics highlight the fund's underperformance compared to industry benchmarks. It's worth noting that the fund's returns have been consistently lower than those of other funds of its size, making it a less attractive option for investors.

Investors are standing by to withdraw a whopping $7 billion from the UBS Trumbull Property Fund, a person familiar with the matter told The Wall Street Journal.

The fund's exposure to retail real estate, including regional malls, has driven the decision to leave the fund, according to a Nebraska Investment Council adviser, Townsend Group.

Investors have been leaving the fund for some time now, with the Nebraska Investment Council planning to redeem its investment of $167 million to facilitate investment in another open-ended fund.

The fund's underperformance versus industry benchmarks has hastened the investor flight, with Trumbull performing worse than the NCREIF NFI-ODCE index on a 1-year, 3-year and 5-year basis as of a 2018 presentation to the City of Naples, Florida, Police and Fire Pension Plans.

Other investors leaving the fund in recent years include the Chicago Teachers' Pension Fund, State Universities Retirement System of Illinois, North Carolina's Treasury Department, and the Alaska Retirement Management Board.

The queue for redemptions from the open-ended UBS Trumbull Property Fund stood at 60.4% of the fund's $10.8 billion net asset value as of the end of 2023.

Here are some of the notable investors who have left the fund in recent years:

The inability to sell assets quickly has limited UBS's ability to meet redemption requests over the past two quarters, according to the Marin County Employees Retirement Association's meeting document.