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Investment trusts: why investors should consider property
Investors could benefit as property starts to behave differently – or decouple – from other asset classes like shares and bonds according to Gary Hutcheson, manager of UK Commercial Property investment trust.
Property is starting to behave differently – or decouple – from other asset classes like shares and bonds according to Gary Hutcheson, head of Ignis property and manager of the UK Commercial Property investment trust.
This could help investors trying to diversify their portfolios by buying across asset classes – shares, bonds, property, commodities and currencies – in the hope that they won't all behave in the same way and therefore protect them in difficult markets.
This theory took a blow during the financial crisis when few asset classes came out unscathed. However diversification could help investors tap into parts of the recovery that they may otherwise miss.
Gary Hutcheson, manager of the UK Commercial Property investment trust – which was trading at an 8% premium to net asset value and which has returned around 11% in the last 12 months – is negative about UK property in some regions, but he said that there was potential even in those regions that have been worst hit by the financial crisis and by chancellor George Osborne’s public sector cuts.