When it comes to property, location matters – an ethos that lies at the heart of our BMO Property Growth & Income Fund. We believe that active targeting of the right buildings in the right locations is key. Combine this with holdings in the very best property businesses operating in markets characterised by strong demand and tight supply, and the fund offers investors the attractions of real estate investing whilst avoiding its potential pitfalls and challenges.
Look beyond the headlines. Invest in sectors, locations and property companies that continue to offer real potential from an investment perspective.
Just now for example, would you want to be exposed to high street retail assets or prime London office space sitting empty as the WFH revolution gathers pace? We see these as long-term structural shifts that have been magnified by the COVID-19 pandemic. The move to online retail has been in play for some time, but coronavirus has added further impetus – that’s bad news for high streets but supportive of the industrial /logistics sectors. Offices outside London have fared reasonably well in terms of occupancy rates– a sharp contrast to central London which in a socially distanced world is paying the price for its status as the ‘longest average commute’ destination in Europe.
But look beyond the headlines and it is possible to select sectors and locations or property companies that continue to offer real potential from an investment perspective. It’s this emphasis on the right locations together with our blended direct/indirect structure that meant back in mid-June we were the first daily-dealing property to reopen after uncertainty was lifted in the industrials and logistics sectors. This brought our portfolio well below the trigger point set by the FCA and meant that our fund was suspended for just 8 weeks.
Best of both – direct & indirect
The structure of our fund is no accident. When we launched 15 years ago, we chose a hybrid of UK physical property and Pan European real estate securities for good reason. We wanted to tap into both the rental income stream of physical property and the liquidity, diversification and active positioning benefits of property equities.
Doing both, in our view, was key in offering investors access to an illiquid asset class in an open-ended and daily dealing format. It’s a structure that’s been tried and tested. The fund remained open through the credit crunch and global financial crisis – both real liquidity events. Our recent 8-week closure was one that was enforced on us by regulator and was NOT due to liquidity constraints.
F&C Property Growth and Income Fund (onshore) was launched on 02.02.2015. This data relates to F&C Property Growth and Income Fund Ltd – this was previously an offshore fund that invested according to the same strategy as the F&C Property Growth and Income Fund (onshore), for which it is now a feeder fund. The fund name was changed to BMO Property Growth & Income on 12.11.2018
Source : BMO Global Asset Management. Data as at 04.09.2020