Annabel Brodie-Smith Blog: Behind the building blocks of property funds


#1

Originally published at: http://whichinvestmenttrust.com/annabel-brodie-smith-blog-behind-the-building-blocks-of-property-funds/
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#2

I was having a debate about some of the issues you’ve raised here a while back @Annabel Brodie-Smith with an IFA friend of mine, his argument with me was that he liked unit trust property funds like Scottish Widows (he mentioned others too) because he could get his clients money out from them easier. The discussion I had with him was at the end of last year before the problems with the unit trust property funds came up.

I wonder if he still has the same views about them now. I’ve emailed him a link to this article, let’s see what he has to say now.

I stay clear of property unit trusts after being locked in to one for years with my previous IFA. This one had borrowed so much money that what I thought was a low risk investment turned out to be anything but.


#3

I think the problem with property funds is people invest in to them for the wrong reason. The natural reason for investing in them is for income, yield.

I remember some of those property funds you’re talking about @stephengunn - Glanmore property fund springs to mind.

I don’t think it makes much sense to structure a property fund as an unit trust for the reasons Annabel sets out in her article (I can’t get her name to pop up bye the way).

I think the AIC should do a campaign on the benefits of owning property in investment trusts, especially with all these pensioners around liking for a yield to fund their retirement.


#4

Thanks very much for your views - it’s really interesting to hear you’ve been debating this with an adviser friend recently. Also enlightening to hear about your experience with an open-ended fund.


#5

Thanks Casper. Hoping my name is popping up now. We have done a new guide on using alternative assets including property very recently. We have done a lot of work to emphasise the benefits of using property for delivering income in retirement, especially in light of pension freedom.