ISIS ASSET MANAGEMENT
ISIS PROPERTY TRIST 2
Type:
Closed-ended investment company
Aim:
Income and growth by investing in UK office, retail and industrial properties
Minimum investment:
Subject to negotiation with stockbroker
Investment split:
43% retail, 34% industrial, 23% offices
Place of registration:
Guernsey
Yield:
6.75%
Charges:
Annual 0.85%
Commission:
Subject to negotiation
Tel: 0845 850 1515
The Isis Property Trust 2 is a Guernsey-based closed-ended fund which aims for income and growth by investing in a portfolio of 30 freehold and leasehold UK commercial properties.
Capital Trust Financial Management partner Bruce MacFarlane thinks the product is excellent and hard to fault. He says: “Property products are very much in vogue with new offering coming to the market on a regular basis. The Isis property trust offers an excellent means for clients to get exposure to the commercial property market.”
In MacFarlane's view, the company offers an attractive alternative to traditional property exposure via the likes of insurance bond funds. He says: “Due to its ability to leverage, the Isis property trust should provide for greater returns - albeit with a greater degree of volatility.”
MacFarlane likes the trust's Isa eligibility as this allows the naturally high yield to be paid to investors exempt from income tax. He adds that shares held outside an Isa wrapper benefit from the individual's annual capital gains tax exemption and taper relief over the long term
He continues: “The shares also offer a very cost-effective means of entering the property market when one considers that stamp duty alone on commercial property is 4 per cent. The company has a good spread of properties with a favoured weighting towards retail but with good exposure to office and industrial. Average lease lengths are at the longer end with strong covenant security and negligible voids.”
MacFarlane feels it would be prudent for investors to be aware that property investment carries risk and that commercial valuations are trading at record multiples. In his view the growth in this asset class over he last five years is unlikely to be maintainable going forwards.
Looking at possible competitors MacFarlane suggests similar trusts such as Scottish Widows UK balanced property trust and structured funds such as Close Brothers PIP.
BROKER RATINGS:
Suitability to market: Good
Investment strategy: Good
Charges: Good
Adviser remuneration: Average
Overall 8/10
