Threadneedle is clearly hoping to attract a broader investment audience for its property unit trust by relocating the former Sackville Property Unit Trust offshore to Jersey.
It is hoping the fund will appeal to IFAs, as witnessed by the minimum investment subscription of £25,000 for IFA clients, with £250,000 required from direct investors.
Threadneedle's property fund has consistently performed well when compared with peer group competition.The annual charge of 1.25 per cent is competitive and this can be reduced by up to 0.5 per cent if IFAs elect not to take the renewal commission of 0.5 per cent.
The fund has no initial charge but does suffer from a high bid/ offer spread of 7.5 per cent. The spread reflects stamp duty and the costs associated with buying and selling property.
With recent negative comments surrounding corporate bond funds and split-cap zeros, property funds are proving an attractive investment class. Property fund managers need to demonstrate skilled and active management with a view to capitalising on the yield from investment in good quality commercial property.
By relocating to Jersey, the door is open to investors other than UK pension funds and charities. Andrew Strang has over 20 years experience in property investment management and has earned a reputation as a sound prudent manager. The Threadneedle team is clear and concise about its investment approach and keen to underline their “pragmatic” focus.
Kevin Morgan is managing director of Ezi UK