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Swip looks to improve flexibility of property fund

Scottish Widows Investment Partnership is looking to widen the investment remit of its £1.5bn property trust.

Swip is proposing to improve the flexibility of the product by investing in other indirect property assets, particularly through derivatives and cash products.

At present, the prospectus does not allow the fund to invest in bond-type products. Fund manager Gerry Ferguson says the company will look to invest at the unsophisticated end of the market.

He says: “The derivatives market has become established since we launched the fund in 2004 and we have to be conscious of moments of stress in the market by ensuring our investment policy is not curtailed.

“We are talking about the likes of Euro-bond notes with a return based on the IPD index. It will not affect the risk profile of the fund.”

Ferguson says the proposals, which would become effective at the end of month, would see the fund lower its minimum exposure to direct property from 70 to 60 per cent.

Hargreaves Lansdown senior analyst Meera Patel says: “From a liquidity point of view, it will help. The manager calls will be important.”

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