Type: Closed-ended fund
Aim: Growth or income by investing in a portfolio of seven Close Property Investment property funds
Minimum investment: Lump sum 2,500
Investment split: 100% in Close Property Investment property funds
Place of registration: Isle of Man
Charges: Initial 5%, annual up to 1.865%
Commission: Initial 2.5%, renewal 0.25%
Tel: 0870 733 3773
ClosePip Isa and Pep is a closed-ended fund that enables the ClosePip fund of property funds, which invests in seven Close property funds such as the capital appreciation trust and freehold income trust, to be accessed through Isas and Pep transfers. Investors can choose between a growth portfolio or an income portfolio.
Andrews Gwynne investment manager David Cowell says: “This product offers diversification away from equities and bonds into property in numerous forms. It is very tax efficient as there are no withholding taxes.”
Cowell likes the idea of having flexibility of both the income and growth portfolios to increase or decrease exposure to the underlying property funds in line with their risk profiles.
Looking at the product literature, Cowell says: “It is comprehensive, if somewhat intimidating literature. The company cannot be faulted on the degree of information given.”
Discussing the negative features of the fund Cowell points out that the closed-ended property funds contained in the underlying portfolio can be quite risky, although these are potentially the most profitable. He adds that other holdings such as the freehold income trust are at the opposite end of the spectrum.
Cowell finds there are no direct competitors to this fund and believes it could be effective in the medium to long term as part of a balanced portfolio of at least 50,000. He concludes: “None of the large amorphous property funds come close. However, I cannot see that this is an offering purely for the one-off Isa market as it is actually quite sophisticated.”
Suitability to market: Average
Investment strategy: Good
Adviser remuneration: Average