Fri, 11/07/2014 - 13:34
Quarter two net sales data from the Skandia Investment Solutions platform reinforces the market wide spike in property fund sales, suggesting investors are unsure about some asset classes and are looking elsewhere to balance their portfolios.
With poor cash rates, low bond yields and some equity markets hitting at all-time highs, investors are turning to property as their favourite investment.
The Q2 net sales figures shows the extent of the recent surge in property, with sales more than double in the last quarter, going from 13 per cent of net sales in Q1 to 27.8 per cent of net sales in Q2. It is now the top selling sector, marginally beating the multi-asset sector which accounted for 27.5 per cent of net sales.
The UK economy is generally believed to be in recovery which creates a positive environment for commercial property. Given the current position with both equity and bond markets, the low equity beta and increasingly stable yield from bricks and mortar is likely to be attractive to investors as a good alternative to hold within a portfolio, and could help reduce overall portfolio risk.
Despite the fall in bond yields, sales into the UK fixed interest sector have picked up. Again this could be a sign that investors are not sure where to turn, and are looking for a balance of alternative investments.
Dean Bowden, head of investment solutions, says: “We are sensing some uncertainty from investors regarding which way the markets will turn. Some sectors have clearly fallen out of favour, such as the global specialist. It is currently difficult to predict where investors will turn for long-term growth. The sudden move to property reflects this uncertainty, with investors looking for alternative solutions to diversify their portfolios.”
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