View more on these topics

Julian Gibbs

The problem with UK property unit trusts is that they have to hold at least 20 per cent in cash or property shares. M&G has overcome this problem by launching a property fund in Guernsey with the property assets managed by Prudential Property Investment Managers, the biggest property company in the UK with over £12bn under management.

Its past performance is outstanding and the property portfolio of its with-profits life fund has outperformed the property sector average over one, three, five, 10 and 20 years. For example, returns over 20 years have averaged 11.2 per cent a year and even over the past year it has managed a return of 11.7 per cent.

Future performance is underpinned by the 6.7 per cent yield on the properties allocated to this new fund.

It has seeded the new fund with £100m of existing property. Unlike the average fund, which has 13 per cent of its property portfolio in central London, Prudential has only 2 per cent in this area. I believe this is a sensible precaution because of possible terrorist attacks.

Most investors are very much underinvested in commercial property. Less than 1 per cent of unit trusts invested directly into property, largely due to the lack of choice of suitable vehicles.

Another important aspect of commercial property is that performance does not move in line with equities, nor is it nearly as volatile.

This new M&G property fund not only offers full investment but also daily dealing and favourable redemption terms – daily for individuals.

While no investment is risk-free, I believe that a property fund which substantially avoids central London properties will prove to be an excellent investment. This one is particularly attractive because it is offshore, with the tax advantages this entails.


Women IFAs say Menu is a positive step

The FSA&#39s planned “Menu” of renumeration has been welcomed by the Women&#39s IFA Group who believe it is a positive step for the industry. More than two-thirds of those questioned said explaining or justifying their fees in the context of the menu would not be a problem. Only 10 per cent thought the menu would […]

Pink extends BTL loan

Pink Home Loans has extended the expiry date on the buy-to-let mortgage funded by Royal Bank of Scotland.The loan, which allows the purchase of up to five properties, offers a rate of 4.79 per cent from June 1 with the £150 discount extended until August 1 2006.The total portfolio limit is £2.5m with no redemption […]

Age Concern could set up a national IFA network

Age Concern is considering a plan to launch a national network of IFAs to service the retirement market for financial services. The charity is believed to be preparing a business plan that will be considered at its June board meeting, where a decision will be made whether to go ahead with a national advisory presence. […]

Aifa&#39s view

There are two European directives which potentially affect IFAs in the area of PI. The insurance mediation directive and the markets in financial instruments directive. The IMD covers insurance business and the Mifid covers investment advice. The IMD requires all intermediaries to have cover of euro1.5 million from January next year. The text is inflexible […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm