Property remains best-selling sector – Cofunds

Property has retained its position as the bestselling sector in October with the highest percentage of net sales, Adam Smith, commercial director at Cofunds, has said.

Commenting on figures published by the investment platform, he said: “As the fundamentals of the economy have improved, so too has business sentiment and consumer confidence. The commercial property sector has been a key beneficiary of this trend.”

According to data from Cofunds, property has provided a good yield of late at a time when income has not, and continues to be a popular investment diversifier for investors.

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Mr Smith said: “As a result of these strengthening economic drivers, the sector remains attractive from an investment point of view. In October alone, Cofunds saw £52m of net inflows into the sector.”

The sector’s strong returns, relative to other asset classes, is expected to continue in the short term, the figures suggested, however, commentators have said the rate of return will slow down next year.

Top Five Sectors (source: Cofunds)
1. Property
2. UK Equity Income
3. Mixed Investment 20-60% Shares
4. £ Strategic Bond
5. Global

Adviser View

James Norton, director at London-based Evolve Financial Planning, said: “No one knows what the returns will be tomorrow let alone next year. It is hardly surprising that money is going into the sector, but one needs to buy when it is down.

“It may continue in the short run, but what I do not want to see is people seeing headlines that property has done well and therefore buy it. You want to buy before it has done well.

“The other point to remember was that during the credit crunch many people were caught out, and property funds suffered. It is a very illiquid asset and investors must realise this.”