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Funds set to gain from demolition job on Sipps

Fund managers stand to benefit from Chancellor Gordon Brown’s shock scrapping of residential property from Sipps as advisers look to put clients’ money elsewhere.

Property funds are the most obvious beneficiaries of Brown’s U-turn but investors are also likely to broaden their portfolios following the change.

Threadneedle communications director Richard Eats says there is no longer a danger of investors putting all their Sipp into inflated residential property. He expects property funds and real estate investment trusts to benefit and he is also optimistic that products that provide diversification of risk such as absolute return bond funds will prosper.

Gerrard Investment Management communications director Brian Tora expects cautious managed funds and income funds to capitalise as well as products offering low vola- tility and diversification.

He says: “I am inclined to say I told you so. Those who have set up operations to deal with putting residential property into Sipps will be considerably disadvantaged by the Chancellor’s move but I would expect the investment industry to take up the challenge presen- ted by the opportunity for more diversification.”

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