Property funds managed by Janus Henderson, Legal & General Investment Management and M&G are among those that the financial advisers in the FE AFI panel think could be appropriate throughout the bulk of an investor’s time in the market. 
The FE Adviser Fund Index (FE AFI) is designed to act as indicator of the UK funds market. The three FE AFI portfolios are compiled by a panel of the UK’s leading financial advice firms and showcase the funds they think are most appropriate for investors of different risk tolerances.
The FE AFI Aggressive portfolio contains funds that the panel thinks could be suitable for an investor in their late 20s, FE AFI Balanced holds funds for a person in their mid 40s and FE AFI Cautious is made up of funds for those in their late 50s. These selections assume the investor is saving for a pension at 65.
In the following article, we look at the IA Property funds that can be found in all three of the FE AFI portfolios, suggesting they could be appropriate for investors at all stages.
F&C Property Growth and Income
First up is the £385.1m F&C Property Growth and Income fund, which is managed by Marcus Phayre-Mudge, George Gay and Alban Lhonneur. The UK Oeic version of the fund has been open since January 2015 but this is a mirror of a Guernsey-based strategy; over the past decade, the strategy has outperformed with an 83.59 per cent total return.
Performance of fund vs sector over 10yrs
Source: FE Analytics
The portfolio is built around UK direct commercial property and quoted real estate securities in the UK and continental Europe.
It currently has just under half of its assets in property shares listed in Europe (France is the largest weighting here, followed by Sweden and Germany), with another 16.8 per cent in UK property shares and 24.1 per cent in direct property.
Largest holdings include Eurocommercial Properti-CVA, Mercialys and Tritax Big Box Reit. In terms of its physical exposure, the largest weighting is to industrial units, which make up 19.2 per cent of the portfolio, with offices accounting for 4.3 per cent.
F&C Property Growth and Income has an ongoing charges figure (OCF) of 1.07 per cent and is yielding 4.10 per cent.
Janus Henderson UK Property PAIF
The next fund included in all three FE AFI portfolios is Marcus Langlands Pearse and Ainslie McLennan’s £2.9bn Janus Henderson UK Property PAIF. The fund has outperformed the average UK direct property fund over the past one, three, five and 10 years.
In analysing opportunities, the managers focus on tenant quality and prefer low-risk tenants that are well-resourced financially. It invests in UK physical properties, with top holdings including RD Park in Hoddesdon, 169 Union Street in Southwark and Capital Park in Cambridge.
Performance of fund vs custom sector over 10yrs
Source: FE Analytics
Square Mile Investment Consulting & Research said: “The managers are acutely aware of the needs of investors and manage the fund with a longterm focus on what they believe a commercial property portfolio should aim to deliver.
“They have a keen sense for the key drivers of the UK commercial property market (such as liquidity and tenant quality) and therefore seek to invest in good quality properties with financially sound tenants in order to mitigate these risks.”
Janus Henderson UK Property PAIF has a 0.84 per cent OCF and yields 2.70 per cent.
L&G UK Property
Another fund that advisers suggest might be suitable for investors of all ages is the £3bn L&G UK Property fund, which is run by FE Alpha Manager Michael Barrie and Matt Jarvis. It has also made a higher total return than the average direct property fund over one, three, five and 10 years.
L&G’s property team is one of the largest in the UK and its approach combines top-down and bottom-up analysis, although the team believes that stock selection is the most important contributor to total returns.
Performance of fund vs custom sector over 10yrs
Source: FE Analytics
Many property portfolios concentrate on London and the south-east but L&G UK Property has a wider geographical coverage than most of its peers. It currently has 10.83 per cent of assets in central London and 10.83 per cent in the south-east, although there is 13.72 per cent in the West Midlands, 5.71 per cent in Scotland and 5.59 per cent in Yorkshire and Humberside.
Its top holdings are Fradley Park in Lichfield, Birstall Shopping Centre in Leeds, 15 Bonhill Street and 18, 20 & 22 Epworth Street in London, One Colmore Square in Birmingham and Follingsby Park in Gateshead.
L&G UK Property has a 0.75 per cent OCF and is yielding 2.70 per cent.
M&G Property Portfolio
Fiona Rowley’s £3.4bn M&G Property Portfolio is the final property fund to have a place in all three AFI indices. Unlike the previous funds in this article, it has underperformed the average direct property fund over one-, three-, five- and 10-year periods.
Rowley and deputy manager Justin Upton are chartered surveyors by trade and have good levels of experience in the property business, with more than 20 years and 10 years of experience respectively.
Performance of fund vs custom sector over 10yrs
Source: FE Analytics
Square Mile analyst said: “The manager of this fund has lengthy experience and is acutely aware of the potential issues facing an open-ended fund investing in what is an illiquid asset class. The fund is managed with a good appreciation of the needs of its underlying investors and seeks to meet its objective through a well-diversified portfolio of prime and high-quality secondary properties.”
Some 30 per cent of portfolio is in offices, with 21.1 per cent in retail warehouses and 16.9 per cent in industrial units. The largest holdings are New Square Bedfont Lakes Office Park at Heathrow, Parc Trostre Retail Park in Llanelli and Wales Designer Outlet in Bridgend.
M&G Property Portfolio has a 1.62 per cent OCF and yields 3.02 per cent.