Top 5/Bottom 5: Property

Top 5/Bottom 5: Property

Property funds can be appealing to variously skilled investors. Property offers a sense of familiarity to new investors when the investments are in regions that they are well acquainted with. As it is a broad sector, more seasoned investors can look towards more risky or foreign underlying assets.

In order to qualify for this IA sector, funds must be true to the name and invest predominantly in property. Funds should either invest at least 60 per cent of their assets directly in property, or invest at least 80 per cent of their assets in property securities. If a fund’s direct property holdings fall below the 60 per cent threshold for longer than six months, it must then invest a sufficient amount of their balance of assets in property securities to ensure that at least 80 per cent of the fund is invested in property, in which case it becomes a hybrid fund.

The best performing property fund is currently the BNY Mellon Global Property Securities I Hedged Inc. Launched in 2009, this £10.4m fund invests entirely in property shares, primarily in the US, Japan, and Europe. The largest holdings include 5.1 per cent in American commercial real estate company Simon Property Group, 2.9 per cent in Japanese real estate developer Mitsui Fudosan, and 2.7 per cent in US self-storage business Public Storage.

Article continues after advert

HC FCM Salamanca Global Property 1, is currently the worst performing property fund in the sector. The £9.6m fund was launched in 2007 and has consistently underperformed the IA property sector average. The fund invests 89 per end in property, 3.7 per cent in international equities, and the remainder in cash and others.

As it is such a board sector, the performance of an individual fund can vary dramatically depending on the underlying assets. It is best for investors, especially those new to the sector, to seek advice when choosing which fund suits their regional and risk profiles.

Best and Worst Property Funds, 1 Year to 8 June 2015
Top 5
BNY Mellon Global Property Securities I Hedged Inc GBP£1,021.74
Aberdeen Property Share A Acc£1,017.58
First State Global Property Securities A GBP Acc£1,019.83
Fidelity Global Property Acc£1,016.45
First State Asian Property Securities A GBP Acc£1,015.83
Bottom 5
HC FCM Salamanca Global Property 1 Standard GBP£972.09
Aviva Inv European Property A Acc EUR£990.65
Aviva Inv Asia Pacific Property I GBP£993.23
Standard Life Investments Global Real Estate Ret Acc£998.92
Schroder Global Property Income Maximiser A Acc£1,000.27
Figures as at 9 June 2015. Source: FE.

Previous Top5/Bottom5:

China/Greater China

Global Bonds

Europe including UK