Important information about property funds
Fund updatesWhen there are more people leaving property funds than investing in them, the managers may have to sell properties to pay claims.
If this is the case, one or other, or both, of the following steps may be taken to protect the remaining investors in any fund investing either directly in property or in other funds that are themselves mainly invested in property:
- When it’s felt there’s a definite trend towards more people selling units in the funds than buying units, the valuation basis may change to reflect this. This will result in a drop in our fund price. This will be bigger than for other types of funds because of the extra costs involved in buying and selling property when compared with, say, shares.
- We may also, but not necessarily, delay acting on instructions to switch/cash in an investor’s investment by anything up to 12 months if market conditions make it difficult for the manager to sell properties at a fair price.
The value of properties is determined by independent valuers appointed by a fund manager and is generally a matter of their opinion rather than fact.
Please be aware that property funds can go down in value as well as up and you may not get back the amount originally invested.
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