Type: Authorised property unit trust
Aim: Income and growth by investing directly in UK commercial property
Minimum investment: Lump sum 500, monthly 50
Isa link: No
Pep transfers: No
Investment split: 37.3% retail, 30.6% industrial, 25.3% offices, 6.8% other
Charges: Initial 5.25%, annual 1.5%
Tel: 0845 6050444
Britannic Asset Managements UK property fund aims for income and growth by investing up to100 per cent directly in UK commercial property.
Chase de Vere research manager Justine Fearns feels the changes to Isa legislation mentioned in the budget make this an interesting time to come to the market with a property fund. She says: “Commercial property can offer diversification as it has a low correlation to equities, bonds and cash.”
Fearns also points out that commercial property can diversify an income stream so it is ideal for income seekers, particularly with the funds regular monthly payments targeting around 4.5 per cent. She likes the funds low minimum of 500 plus a regular savings option, which she believes increases availability to a wider audience and makes it reasonably flexible. “However, investors must remember that its not always as flexible when it comes to selling your holding,” she adds.
Fearns states the fund is managed by a well structured and experienced team with a strong investment process.
Turning to the potential drawbacks Fearns says: “At 291m, the fund is a decent size but compared to the big property players it is a minnow. Demand for commercial property is expected to be high over the coming years and if this is the case, I would expect larger funds to fare better.” She cites New Star and Morley as possible competitors.
Fearns is critical of the annual management charge, which she feels is at the higher end of the range. She says: “There are also specific risks associated with property that clients should be aware of, such as liquidity, potentially high bid/offer spreads, and subjectivity in relation to valuations. But these are specific to the asset class in general rather this fund.”
Fearns points out that Britannic has been through a lot of changes in the last few years and has seemed to have weathered storms well. She concludes: “But I have yet to be convinced on Britannic direction and business strategy and this impacts significantly on my views of any established or new products it is marketing.”
Suitability to market: Good
Investment strategy: Average
Adviser remuneration: Average