Introduction to Property
There are two main approaches to property investment. The first is to invest in property companies listed on the stock exchange, building a UK or globally-focused portfolio. The second is to invest in bricks and mortar, mainly via funds that own and manage commercial properties directly.
Each approach has different investment characteristics. For example, funds that invest in property companies will move more in line with conventional equity markets over the short-term. Equally, they may be more capital-growth focused, rather than yield-focused.
Bricks and mortar funds will offer greater diversification from conventional equity markets, but are also likely to be more focused on delivering a sustainable yield. However they are also less ‘liquid’ – managers of open-ended funds may not find it as easy to buy and sell the underlying holdings to meet investor redemptions. However this is not an issue that effects closed-end investment companies.
Property funds may specialise in high end 'prime' property, which usually proves more defensive in an economic downturn. Alternatively, they may focus on secondary property, which will be more vulnerable in a downturn, but may outstrip prime property in a buoyant market.
During adverse market conditions, some property funds can suspend withdrawals for periods of time (typically 6 months).
The tax treatment of investments is subject to tax law and HMRC practice which are subject to change.
OEICs and Unit Trusts
OEICs and Unit Trusts
|Name||6 Months (%)||1 Year (%)||3 Years (%)||5 Years (%)||Currency||Sector|
|HSBC FTSE EPRA/NAREIT Developed GBP||-7.04||-7.39||12.61||23.12||GBX||Property - International||Buy|
|SPDR Dow Jones Global Real Estate UCITS ETF GBP||-7.52||-9.50||7.30||16.67||GBP||Property - International||Buy|
|Source Real Estate S&P US Select Sector UCITS ETF||-5.32||-2.95||-||-||USD||Property - North America||Buy|
|iShares Asia Property Yield UCITS ETF GBP||-2.44||-2.31||20.47||21.63||GBP||Property - Asia||Buy|
|iShares Developed Markets Property Yield UCITS ETF GBP||-7.85||-8.60||14.49||29.55||GBP||Property - International||Buy|
|iShares European Property Yield UCITS ETF GBP||2.01||12.35||40.71||72.19||GBP||Property - Europe||Buy|
|iShares MSCI Target UK Real Estate UCITS ETF GBP||3.98||1.98||1.47||-||GBP||Property - Europe||Buy|
|iShares MSCI Target US Real Estate UCITS ETF GBP||-11.02||-13.30||10.12||-||GBP||Property - North America||Buy|
|iShares UK Property UCITS ETF GBP||7.09||4.00||0.49||50.79||GBP||Property - Europe||Buy|
|iShares US Property Yield UCITS ETF GBP||-13.79||-16.65||7.91||27.30||GBP||Property - North America||Buy|
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