Legal and general

celt80

Sorry I don't understand what you mean? Newbie alert!! lol

dunstonh

celt80 wrote: »

Sorry I don't understand what you mean? Newbie alert!! lol

The property fund is a single sector fund. It invests in just one sector - property. Single sector funds are designed to be held in a portfolio of other single sector funds. Typically 8-12 of them.

So, if you decided that L&G property was suitable for your property allocation then you have another 7-11 funds to research to build your portfolio.

Single sector funds should not be held by themselves.

celt80

yeah I've been looking to see what funds have preformed well over the past 5 years and have found a few. Do you have any to recommend I should look at?

eskbanker

celt80 wrote: »

yeah I've been looking to see what funds have preformed well over the past 5 years and have found a few. Do you have any to recommend I should look at?

That's not really a viable approach to take, and certainly not what would be suggested by an IFA!

The starting point for investment is sorting out the foundations, in terms of not just how much money you have but what your objectives are, what your risk tolerance is, what timescales you have in mind, etc. Once this baseline has been established then it's a case of finding one or more investments to achieve those objectives, rather than looking at historic performance figures for (seemingly) random unconnected funds.

As dunstonh says, assembling a properly-designed portfolio of single-sector funds is one approach to achieve adequate diversification, but many take the one-stop-shop approach of global multi-asset funds that are inherently diversified already, thus negating any need for the relatively unsophisticated investor to research lots of detail (or pay someone else to do it!).

In addition to the L&G Multi-Index fund Alexland referred to earlier, there are popular products such as HSBC Global Strategy, Vanguard LifeStrategy and Blackrock Consensus.

jaybeetoo

If you want to invest in a property fund then Have a look at investments trusts.

bowlhead99

celt80 wrote: »

yeah I've been looking to see what funds have preformed well over the past 5 years and have found a few. Do you have any to recommend I should look at?

As Dunstonh says, if you're using specialist funds you'd need to get a lot of different types of funds - 8-10 or more to cover all the different angles to create the 'medium risk' portfolio which you mentioned on another thread that an adviser could set you up with.

The problem with doing that by looking at what funds have done well over the last 5 years, is that different funds will do well at different times, and the last five years only covers one part of an economic cycle. Not all the funds types that you need in a balanced portfolio will appear in a list of best performing funds for a specific time period.

For example, a fund which invests in US company shares or Japanese company shares might have done better in the last 5 years than a fund which only invests in European shares. Or a fund which invests in UK corporate bonds might have done worse than one which invests in UK commercial property. However, you don't know what the next five years will bring, so that's not a good reason to exclude bonds or UK or European shares from your diversified portfolio of investment funds. If you only buy the funds which show the greatest return over recent short periods like 1, 3, 5 years, you'll end up with a higher risk and volatile portfolio than most people will be looking for.

It can make sense to look at high performing funds within their own respective sectors (eg one UK-focused fund versus another UK-focused fund), but not across regions or asset classes (e.g. UK vs emerging Asia, equities vs bonds etc). However even within a sector you will find some funds have a higher risk style than others, so they look very good in the good times when you are looking for 'funds that have performed well' and then lose over half their value in a crash, when their rivals in the same broad sector fare less badly.

As you mention you're a newbie, I would steer clear of trying to build a bespoke portfolio out of specialist building blocks based on recommendations from forum users on what happened to work well for them in the recent past. Better to look instead at the funds which combine different types of assets in one fund and do the allocations for you. You can find these at a variety of risk levels, the range mentioned by Alexland above is one example.

Or, buy professional advice. Although the pricing you were given by the IFA in your other thread was too high as an initial fee - like any type of professional services firms, when you shop around you'll find there are expensive people and more competitive people.

celt80

Thank you for the advice I really appreciate it

Reluctantpensioner

One additional thing to know about this one: unlike most vanilla funds it has a bid/offer spread.
At time of posting: Sell £0.873 Buy £0.9235 About 5%.
So, if you are after quick returns, this is not one for you, the first year will be spent making up the spread.

I hold it: as a small percentage (1.14%) of a diverse portfolio, held for the long term.
As has been mentioned, direct property, especially in one country, is not a "liquid" asset. The units generally hold value (they actually own property), so are less linked to market changes. But sometimes you just can't sell them: "because the market conditions aren't right".
2016 was one such time - look at the fund performance graph and you will clearly see it. (Not just L&G, all direct UK property did this).

I you go to the "holdings breakdown" section of most fund sites you'll see the difference with this one: instead of the normal x% in company Y. You'll see addresses they have a stake in like: BIRMINGHAM - ONE COLMORE SQUARE.

redpete

Thrugelmir wrote: »

Not as if you can sell a commercial property in a day. If investors decide to withdraw their cash en masse.

Well yes, and they have mechanisms to deal with that - such as suspending dealing temporarily. Swing pricing is a way to ensure the cost of transactions falls on those selling rather than everyone holding money in the fund. This is the only fund I hold that 'swings' by anything like as much as 6%.

Thrugelmir

redpete wrote: »

Well yes, and they have mechanisms to deal with that - such as suspending dealing temporarily. Swing pricing is a way to ensure the cost of transactions falls on those selling rather than everyone holding money in the fund. This is the only fund I hold that 'swings' by anything like as much as 6%.

I'd favour an investment trust such as TR Property or Standard Life for a first foray into the sector. Far more stable. Plenty of more specialist options though.