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Warning over &#39hot air&#39 property funds

A Midlands IFA says the retail marketing of some investment companies&#39 property funds is “hot air”.

Adrian Smith, of Solihull firm Adrian Smith & Partners, says many investors want to maximise their investment in bricks and mortar but can get caught up in commercial property unit trusts without realising their restrictions in terms of liquidity and their cash/property equity exposure. Smith, speaking on the fifth anniversary of his firm, said commercial property shares are most closely correlated with equities in overall investment behaviour.

He said he believes commercial property investment is suitable for many investors, as it combines a high and stable yield with tangible assets, pointing to real estate investment trusts as possible further opportunities.

“So long as people have invested in this manner with their eyes open, then there is no problem but my concern is that some investors may have been taken in by the hot air of some marketing departments when what they really wanted was a maximum bricks and mortar investment,” he said.

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