BlackRock has launched an iShares MSCI Target UK Real Estate Ucits ETF, its second exchange-traded fund that aims to achieve a risk and return profile similar to physical property.
The company claims the fund is the first to offer exposure to UK property in a way that aims to accurately reflect the characteristics of physical property while preserving the liquidity and ease of access of a real estate investment trust (REIT).
| Key features |
The underlying index’s methodology consists of three elements: Reducing unpredictability by giving higher weightings to lower volatility stocks Using REITs’ balance sheets to calculate the average proportion of debt across the REITs portfolio Allocating to inflation-linked government bonds to reduce leverage and provide inflation protection. |
Tom Fekete, head of product development for iShares in EMEA, said: “Investors are having to work even harder to find assets with the potential to deliver an attractive yield, and as part of this they are increasingly looking at property.
“Hamstrung by high barriers to entry, direct investment in real estate is not always a viable option, and this is particularly the case for those investors with a small amount of capital to invest.”
Adviser view
Andrew Swallow, director of London-based Swallow Financial Planning, said: “At this moment in time I have no use for that fund, but I can see a number of institutions who will like it because they dogmatically don’t choose bricks and mortar.”
