Commercial Property Funds: Crash of 2008 Again?

Brexit is to blame for the temporary closure of three open-end property funds from M&G, Aviva and Standard Life. But should this be a trigger to ban daily trading?

Muna Abu-Habsa 6 July, 2016 | 1:59PM

With a distinct whiff of 2008 about them, recent events at UK property funds recall Sir Winston Churchill’s paraphrasing of Santayana’s admonition: "those who fail to learn from history are doomed to repeat it.”

The mismatch between daily-dealing direct property funds and the illiquid nature of their underlying investments is bad for investors

A number of open-ended UK commercial property funds suspended trading during the first week of July, thereby freezing investors’ rights to redeem their shares.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Janus Henderson UK Pty PAIF A Acc229.17 GBP0.00
M&G Property Portfolio GBP A Acc120.75 GBP-0.01
SLI UK Real Estate Retail Acc107.60 GBP0.00

About Author

Muna Abu-Habsa  is a senior investment research analyst at Morningstar

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