PropertyJul 3 2014

SLI changes strategy on Select Property fund

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

Standard Life Investments (SLI) is set to change the name and investment strategy on its £417m Select Property fund.

From July 28 the fund will be renamed as the Standard Life Investments Global Real Estate fund.

The fund will continue to be managed by the same team, led by Andrew Jackson, but its investment strategy will be changed to have a “higher and more persistent investment in direct real estate assets”.

The fund currently has a mix of assets in both direct property and property securities but is looking to reduce the use of property securities.

Direct investments will now make up between 50 per cent and 80 per cent of the fund’s total assets, while investments in other collective investment schemes will be limited to 15 per cent.

SLI said the changes “will deliver a more stable mix of assets, lower volatility in the fund’s price movements and will offer the potential for a higher income yield”.

The firm will also change the benchmark on the fund from the IMA Property Sector to the IPD Direct/ MSCI World Real Estate Custom Index.

SLI said the IMA Property sector was no longer an appropriate benchmark because it is “increasingly dominated by real estate securities only funds.”

The management team will also stop trying to hedge currencies on the fund, though its remit will still allow it to do so, because it said a review found that the hedging did not deliver enough of a benefit to long term investors.