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M&G seeks diversification through bricks and mortar

M&G’s income multi-asset fund is holding the M&G property portfolio to gain exposure to bricks and mortar.

Fund manager Steven Andrew, who runs the income multi-asset fund, sees property as a source of diversification. Rather than gaining exposure through Reits, which have a higher correlation to equity markets, he prefers bricks and mortar.

Andrew says M&G property meets his requirements for more direct exposure to property in a practical and cost-effective way.

It invests for total returns, comprising income and growth, in a UK commercial property portfolio that spans shops, retail warehouses, offices, industrial property and shopping centres.

Andrew holds almost 7 per cent of the income multi-asset fund in the M&G property portfolio and expects to add to this.

He says: “The fund is managed by Fiona Rowley. Because it is an internal fund I also get the fees back, while other funds charge 4 to 5 per cent. There is uncertainty in the property sector but not enough to make me not want to invest.”

Andrew runs the income multi-asset fund on the basis that there are no absolute safe havens, because there are no fixed characteristics that define a safe investment.

The risk of holding one asset class over another can change over time and Andrews says it also depends on price, with equities even taking their turn as safe havens.

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