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M&G homes in on commercial property

M&G

M&G PROPERTY FUND

Type:
Unit trust

Aim:
Income and growth by investing in UK commercial property

Minimum investment:
Lump sum £1,000

Investment split:
45% retail, 31% industrial, 9% retail warehouse, 15% offices

Place of registration:
Guernsey

Charges:
Initial 5%,
annual 1.25%

Commission: Initial 3%,
renewal 0.5%

Tel:
01245 215707

The M&G Property Fund is a Guernsey-domiciled unit trust which invests in a portfolio of 21 UK commercial properties currently valued at around £95m. It is managed by M&G subsidiary Prudential Property Investment Managers.

ABG International (Isle of Man) investment consultant Julian Melling thinks it is good to see a mainstream provider such as M&G offering an offshore fund investing in property rather than property shares. He feels there is international demand for access to the market.

He says: “The new M&G fund allows clients access to a tax-efficient true property fund. The fund can be accessed via portfolio bonds allowing further diversification of client portfolios at a more bespoke level, bearing in mind the low correlation of property yields to equity and bond returns.”

Melling likes the fact that Prudential Property Investment Management provides the actual research into the market as he believes this is something in which the company has a good and long history. He says: “The literature explains the processes involved in managing a property fund and also details some of the actual properties held by the fund. The fund is diverse in terms of property and client type, not reliant on a particular sector.”

Melling then draws attention to what he feels is the main drawback of the fund. He says: “As with all property funds, there can sometimes be liquidity issues.”.

Considering the possible competitors for the fund Melling concludes: “In the offshore arena the Glanmore fund that has run for over seven years will provide stiff competition due to its performance, transparency and the expertise of Cardales as its adviser on the property market.”

BROKER RATINGS:

Suitability to market: Good
Charges: Good
Investment strategy: Good
Adviser remuneration: Average

Overall 8/10

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