David Hambidge has increased exposure to commercial property in Premier’s multi-asset range in a bid to capitalise on the asset class’ income characteristics and potential for capital growth.
The range’s commercial property allocation has risen from around 5.5 per cent to more than 11 per cent today. It was executed through a range of holdings, including listed property funds from Picton and Schroders, open-ended funds Swip Property and Henderson UK Property, and specialist property vehicles MedicX and Target Healthcare.
The move was carried out as a “general shift” into the asset class across the firm’s range but was most pronounced in income-focused portfolios such as the £216.4m Premier Multi Asset Distribution and the £50.1m Premier Multi Asset Monthly Income funds.
Premier head of multi-asset research Ian Rees says: “Some of the traditional fixed interest areas certainly seem to be facing a bit of a headwind with rising yields. Property, on the other hand, appears to be a sector that at long last is starting to get tentative signs of a tailwind.
“Over the last five years, lots of assets have recovered considerably in value but the one area that is still yet to get anywhere back from its collapse is commercial property.”
Chase de Vere head of communications Patrick Connolly says: “Although the outlook is improving, we continue to expect fairly muted returns from ‘bricks and mortar’ property funds producing small positive returns, with this likely to come from rental income more than capital gains.”