If you are older than more than 60 years old and want to maximise your income and conserve your capital, you might want to consider property unit trusts (Puts) as an important part of your portfolio.

This is the message from says the Association of Property Unit Trusts, which said that Puts preserve capital while boosting income.

Backed by direct property investments, The association said that Puts offer investors a high degree of security combined with the potential for the value of the asset to grow over time.

"So not only is the value of the capital likely to be retained, it can also increase," said the association's Craig Hallowes.

In addition, Hallowes said Puts provide a hedge against inflation because the rental income generated is likely to increase over time.

Though there is no guarantee that this growth will exceed or even match inflation, it affords a retired person an excellent one of the best opportunity to have a safe investment together with income growth.

Hallowes said that someone who had invested R100 in a Put in October 2002 would have an investment worth R209,60 today. He would also have received income of R49 over the period. If all the income was reinvested, the Put would be worth R285, substantially more than the R120,25 that he would need just to retain the spending power of the capital.

Hallowes said Puts are effectively a different asset class to equities, bonds or cash, so an investor can benefit from diversifying into another asset class.

"They embody one of the benefits of equities ? the ability to grow their income stream ? but they are traded at a far higher yield than equities, thus maximising income," he said.

The yield on Puts is 7,4% currently, but the dividend yield on the FTSE-JSE All Share Index is a paltry 2,4%.

Hallowes said that Puts offer a unique alternative to investing directly in property. Risk is spread across via a portfolio of properties within the fund.

"Even with a small investment, a retiree is able to achieve considerable diversification, [and] far more than could be achieved individually. Not only that, but the liquidity constraints of buying and owning property do not apply to Puts," he said.

In fact, there is nothing to prevent theTrustees of a retirement fund can from investing fund assets directly in Puts. This is likely to be a cost-effective method of investing in property for such funds, because they would be able to avoid asset management costs. cost layer of an asset manager.

Sowetan