UK Property - Our Stance
Nigel Reeves - Owner & Lead Advisor
M&G UK Property Fund Suspension.
The M&G fund suspension was not wholly unexpected due to the cash holding of 5% in late October and a series of redemption requests.
This fund is large and will have a high number of longstanding historic holders. Other property funds have been raising cash progressively for many months in order to facilitate inflows and outflows.
Currently, Legal & General are holding 28% cash, BMO holding 24% cash and TM Home holding almost 20%.
None of the Property funds held by Reeves Independent have suspended trading.
The Property Funds in your Portfolio.
All the property fund managers held on behalf of Reeves clients have been very quick to contact us to discuss their respective positions. We also enjoy close relationships with all the managers because we have been monitoring the news flow and liquidity of this sector for many years.
The property fund investments held in portfolios are not traded. Indeed, Reeves has chosen to take appropriate long term allocations, with a pension fund mindset, because we believe property offers great diversification benefits to portfolios, whist not being negatively impacted by large equity market swings. The asset class also offers a useful stream of income for all clients with some degree of inflation proofing too.
Our views moving forward.
There has, of course, always been a degree of mismatch in liquidity between daily dealing and the illiquid nature of property. With that in mind, Reeves reviews the property positions and current state of the market in-depth on a monthly basis.
There will undoubtedly be further press comment and investor reaction to the news this week, however we continue to hold the view that maintaining a property allocation offers greater positives to our clients than negatives.
Do you have any questions? Email us at firstname.lastname@example.org.
It is important that no actions should be taken without first taking advice. Personal circumstances and an individual’s appetite for risk means that the advice for one person may not be the same for everyone. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover. Reeves run an advanced investment portfolio management service on an advisory basis only