Trading has been suspended in the M&G Property portfolio with immediate effect, with Aviva and Standard Life following suit.
M&G said: “We announce a temporary suspension of trading in the shares of the M&G Property Portfolio and its feeder fund. Investor redemptions in the fund have risen markedly because of the high levels of uncertainty in the UK commercial property market since the outcome of the European Union referendum.
“Redemptions have now reached a point where M&G believes it can best protect the interests of the funds’ shareholders by seeking a temporary suspension in trading.”
The group went on to add that this would give the fund manager time to raise cash levels in a controlled manner.
MFP believes that Property Funds remain an attractive long term asset class.
We last saw this issue with Property Funds during the 2008/9 financial crisis. Since then Property funds have continued to produce outstanding gains for our clients and we believe will continue to do so in the future.
The graph below shows the performance of the L&G Property Fund compared against the UK Stockmarket since July 2009. It highlights the smooth yet competitive growth of the fund compared to the volatile UK Stockmarket.
We believe that Commercial property remains an integral part of a balanced portfolio and we recommend that our clients ride through this period of turmoil.