The fund is a life assurance mirror fund that invests in office, retail and industrial property throughout the UK and traded endowment policies (TEPs). It invests in a similar fund run by TEP market makers Surrenda-link. The product is called the Surrenda-link fund.
Traded endowments are policies which have been sold because their policyholders wish to encash them for a lump sum. They see this as a more profitable alternative to surrendering the policy.
Royal & SunAlliance has combined these two unrelated investment areas because they both offer low risk and low volatility for investors whilst offering long-term growth.
Although the TEPs market is indeed low risk, the property market has a higher risk profile, especially as there are signs that property prices are stabilising and in some areas are beginning to fall.
According to Standard & Poor's the Royal & SunAlliance property fund is ranked 9 out of 11 funds, based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to July 17, 2000.