Property Funds

updated: January 22, 2010

We encourage all types of investors to include an element of investment into a commercial property fund as part of their overall investment portfolio, whether their attitude to risk is ‘very cautious’ or ‘very speculative’.

This is because property is an asset-backed investment and can therefore provide long term protection against inflation.

At the ’very cautious’ end of the spectrum, where most of their money should be held in cash and gilts, this might be just 5% of their total investments. For ‘cautious to moderate’ investors onwards the percentage invested in commercial property should be more like 10% to 15%.

In our experience most investors, be they individuals or large pension funds, are seriously underweight in this sector. For our part, the dramatic fall in the value of equities and our increasing use of model portfolio tools, have combined to encourage us to make more use of commercial property funds.

Until the development of stock markets, property was virtually the only reasonably dependable form of investment. Today it provides a way of diversifying the assets in investors’ portfolios, offering a different mix of risk and return.

To obtain further information please click here for our pdf Guide to Property Funds.