Investment funds that invest in (commercial) Real Estate?

If you are investing inside an ISA, several UTs and OEICs have a regime which has no initial charge but may have an exit charge for the first 5 years. Some do it outside an ISA as well. Look at M&G for a start.

In message , Terry Harper writes

But they dont have a property fund.

In message , Guttorm Christensen writes

There are few UT/OEICS that invest directly in property.

Look for absolute performance, rather than charges.

A number of directly investing property funds (i.e. those that buy actual property as opposed to those that just buy shares in property companies) have closed to new business because they cant find properties in which to invest with the huge inflows of cash that they have been receiving from disenchanted equity investors who cant take the downside.

The new star fund is quite small and acquisitive, and is prepared to sell if the price is right. Go for absolute performance, not charges. If the initial charge worries you then you arent ready to invest in this way.

Indeed they don't. But then there are not many at all that do. Most such funds are insurance funds, which have to be bought inside a single premium insurance policy.

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In message , Terry Harper writes

Thats right.

You should broaden your criteria to include Investment Trusts. The TR Property Investment Trust, for example, charges 1% on purchases if you deal direct with the manager (Henderson) for your monthly saving. For the lump sum, however, you might be better using a broker (commission + spread might be less than 1% + spread)

In message , dp writes

You must think Ive got it in for you DP but I havent!

The only snag with investing in an IT which invests directly in property is that the benefit of low volatility which is inherent in a direct property UT is lost because of the stock market influence on an IT.

In any event, I dont know of an IT which invests directly in commercial property and the TR fund you mention certainly doesnt invest directly in commercial real estate (which is what the OP wanted). It invests in FTSE listed companies and the IT is happy to invest in the domestic sector as well, as its fund factsheets make clear.

So, I dont know why you are recommending the OP should broaden their criteria.

commercial

TR Property IT *does* invest directly in property. I don't know if it still owns it, but at one time it held the old Simpsons building in Picadilly, for example.

Thanks that's an excellent site! Hopefully they are reliable too! Does anyone know who is behind the site?

John you are quite right - ideally I would want an instrument that would allow investments in funds or similar that make direct investment in properties as opposed to shares in property (related) companies.

There is a Norwich Union fund: then click 'Unit Trusts' and 'Norwich Union Unit Trusts' which leads you to a property fund.

This might be of interest, but they really don't provide much information...

In message , Neil Jones writes

You are right, in its own words "Approximately 80% of the Company?s assets are invested in Pan European listed property securities with the balance in directly owned UK real estate"

In message , Guttorm Christensen writes

This is one of the few UT property funds which invests directly but it still has 18% holdings in shares. It also has 18% in cash which reflects the current 'dash to property' which some investors are doing at the moment. This is a real problem for big funds like this (£690m) because they cant just go out and buy more shopping centres and offices!

The New Star fund, on the other hand is smaller and still acquisitive. (£170m). They outsource some of their management, but I cant at this moment remember to whom.

Solution: use a funds supermarket.

A useful page that lists a number of reputable fund supermarkets is at:

That's a bit like asking, "What's the best computer?" It all depends on your needs, yield expections, time period (short/long term yield), acceptable risk level, and so on. It's also a risky one for any of us to answer, as giving people advice or recommendations on specific funds could mean a legal liability for losses caused by bad advice. You're also at risk because you don't know the full vested interests people have in the instruments they recommend.

Best thing to do is to research, research, research. Use funds supermarket lists to select a small group of funds that sound like what you're interested in. Go to the funds providers' own Web sites (or use research sites like

One thing I *would* recommend is that, based on the sums you're talking about, using an ISA wrapper would make good sense for you. A full (maxi) ISA sounds like it could be ideal, and you can get self-select ISAs from funds supermarkets, with excellent discounts on the underlying funds, although some are lump-sum only (i.e. don't include monthly payments).

Take my advice -- it's worth every penny you paid for it. ;-)

Jon

Why should I think that?

That sounds like the sort of Bull S**t an insurance salesman might dream up. The value of an Investment Trust is set by the market while the value of a Unit Trust is set by the managers' interpretation of the market. There is no significant difference.

I believe JB has read the factsheet now. The Morley High Income Property Fund is also worth considering.

Merely to ensure all options are considered. I personally prefer IT's to Unit Trusts because they can be bought and sold directly with the market rather than through a manager. I accept that other people prefer Unit Trusts for reasons of their own. I am merely suggesting that, when considering an investment, IT's should be considered alongside other alternatives. It would not be unheard of to split investments between Unit Trusts, Investment Trusts and other options.

In message , dp writes

Not being an insurance salesman, or having been on the receiving end of an insurance salesman, I have no idea if this is right or not.

You are right about the valuation of an IT but not in respect of a UT. An equity UT value is merely the sum of the closing values of all the shares it owns. There is no 'manager's' opinions (although they can control the pricing polciy in extreme conditions). The managers of directly Investing Property UTs have the capital value of their portfolio valued at frequent intervals by suitably qualified and impartial surveyors plus an adjustment for rent collected. Commercial property values are largely influenced by rental yields.

If you had bothered to compare the actual volatility of a directly investing property fund with an indirect property UT or the IT referred to, then I think you will find that there is a huge difference dont you?

I dont have the volatility figure of the TR fund to hand but a brief examination of its performance shows it to be more volatile than the FTSE 100 itself, despite a substantially better absolute performance.

So if you actually compare the volatility of direct v indirect I think you will find I am not talking Bull S**t.

Er, I had done anyway. Perhaps if you re-read it you would now see that less than 15% is in direct property, the rest is in shares, some of which are domestic property building shares and a large slice of European property shares, all of which means it fails to be classified as a 'directly investing' property fund.

Agreed.

Thats fair enough, if thats for you, then fine. I invest in Its myself, but not for the reason you describe and I have never expressed a preference for shares (including Its) or, UTs. Its a bit like comparing a vacuum cleaner and a lawn mower, the both clear ground, but clear different ground in different ways.

I must say I am intrigued by your comment about selling via a market rather than through a manager. I know it is years since UTs were traded on an extreme basis but the maximum spread (which is the only bit the managers can influence) is relatively small when compared to the volatility and intra day whims of the stock market.

Wholeheartedly agree, but when the OP wants Direct Commercial Property Investment, thats what he wants and the wrapper is secondary (especially when that wrapper contains something he doesnt want)

Wholeheartedly agree, but I think the OP was looking for a lower volatility than what a 'share based' investment could provide.

Also Intelligent Money £35 per annum gets all initial & annual commissions refunded.

Daytona

Thanks for the pointer.

I'll have to look into it a bit further, and find out which instruments they're selling, and what the real savings are, compared with funds supermarkets.

Jon

Thompson Financial. There's a link at the bottom of each page.