SWIP Property TrustScottish Widows Investment Partnership (SWIP) – Property Trust
This investment fund features in both our cautious and balanced portfolio and is available by opening a SIPP, ISA or a fund account with our wealth management service.. It aims to provide investors with a total return by investing in a balanced portfolio of commercial property.
The fund is managed by Gerry Ferguson.
Gerry is an investment director in the property team at Scottish Widows. He is responsible for the Scottish Widows Investment Partnership Property Trust, Airport Industrial Property Unit Trust and the Covent Garden Market Limited Partnership. He is involved in setting and implementing fund strategy and is also a member of the property investment committee. Prior to joining SWIP in September 2000, Gerry spent four years as a director with RREEF (UK) Limited, the largest independent property fund manager in the UK. Previously, Gerry worked for Scottish Amicable for ten years as fund manager responsible for its Life Property Fund, and before then, for three years with Scottish Widows focusing on the UK market. Between 1974 and 1983 Gerry worked for various organisations dealing with the Scottish property market. Gerry holds a BSc in applied science from the University of Glasgow.
Scottish Widows Investment Partnership (SWIP) is one of Europe's largest asset management companies and part of Lloyds Banking Group Managing funds worth over £90 billion, they have a broad product range designed to meet investor needs.
Why we like this investment and what we expect
We started recommended this investment back in November. We wanted to include property within the portfolio to diversify away from other asset classes, but it was important to us that a fund purchasing real property rather than property shares was chosen. We wanted to avoid a share based property fund as shares in property companies, in the main, have been lifted by a better mood in stock markets generally, whereas commercial property (since Autumn 2009) has only just started to benefit from a better economic outlook.
Commercial Property has been hit very hard in recent years, with many funds suffering losses in excess of 40%. However, according to SWIP’s December 2009 fact sheet – “Data released in December provides further evidence that the market is storming ahead. Demand for good quality stock is outstripping supply, with prices climbing as a result”. The commercial property sector has enjoyed solid growth during the last six months. The Scottish Widows Fund improved by just under 8% during the last five months of 2009.
The SWIP Fund has a significant proportion of its assets held in cash. In fact, around 35% is in cash (at December 2009). Some investors may view this as a negative. Once you have made the choice to invest you would ordinarily want as much money invested as possible. The investment committee at Sterling view the recovery with a degree of caution and favour funds that have a larger degree of liquidity. Property funds can impose a waiting period for those withdrawing capital. It generally only happens when prices are falling and where investors are withdrawing in large quantities, but with the current economic backdrop it is not time to take unnecessary risk.
The fund will naturally invest the cash balance over a period of time and we are more than comfortable that Gerry will not feel pressured to buy property for the sake of buying.
We do not measure this fund against its peer group in the IMA Property Sector. It is very much a diverse investment category. It would be unfair to compare it with a property fund investing with shares for example. Due to the cash balance we expect results to be less volatile than a fully invested fund and a little behind similar funds if the market improves. Conversely, in the event that the recovery falters we would expect this fund to produce higher relative returns and to provide the liquidity (at least in the shorter term) to overcome potential issues relating to withdrawals.
The underlying fund charges 0.94%. Sterling’s charge is in addition.
Fund Manager Factsheet (PDF)Fund Prospectus (PDF)
