Higher interest rates have posed plenty of challenges to the property sector in recent years, be it via expensive mortgages or greater competition from bonds. But as rates start to come down, the asset class retains plenty of its old attractions, from income generation to its status as a diversifier and potential hedge against inflation. Gaining exposure to real estate via funds has never been a straightforward task, however.
Tip style
Growth
Risk rating
High
Timescale
Long Term
Bull points
- Focus on listed companies
- Flexible approach
- History of outperformance
- 14 years of dividend growth
Bear points
- Troubled sector
- Offers lower yield than many direct property Reits
Open-ended property funds hold physical assets that can take months to sell but are obliged to return cash to investors within days should they choose to redeem their units. The liquidity challenges that have arisen from this have caused many buyers to lose faith.