Fees, Tax, Returns

All retail classes are accumulation, so the income is automatically reinvested and rolled-up in the share or unit price. There are currently no retail income classes available.

TM home investor fund is forward priced and the share price is calculated as at 10:30pm every day by the fund’s accountant, Northern Trust. The starting point is to add up the value of all the fund’s properties and cash, take away fund and property management expenses, and divide the result by the number of shares in issue. 

However, if the fund has more new investors coming in (and so expects to buy more properties), there will be an upward adjustment to the share price (known as ‘offer pricing’) to allow for the costs of buying the new properties. If the fund has more investors leaving (and expects to have to sell properties to meet redemptions), there will be a downward adjustment to the share price (known as ‘bid pricing’). These ‘bid’ and ‘offer’ pricing adjustments aim to ensure the fund’s existing investors don’t suffer the costs of buying or selling properties caused by other investors coming into or leaving the fund. At times the fund is neither growing or contracting, it may price on a ‘mid’ basis as it does not expect to incur any transaction costs on properties in the near-term.

The current range of the potential swing in pricing basis can be found in the prospectus which can be downloaded from the library page.

No. The cash held by the fund and the rent from lettings covers these costs, so investors will not be asked to invest more to cover this.

The fund was launched in July 2012 and has a track record of providing attractive returns with low volatility, and with little correlation to other mainstream asset classes. The latest performance figures can be found on the fund factsheets which can be downloaded here, or via the usual data vendors such as Morningstar and Financial Express. 

Please note that the fund was originally named the ‘TM Hearthstone UK Residential Property Fund’, but changed to ‘TM home investor fund’ on 13th July 2018. Some historical information or data on other websites may still refer to the previous fund name.

Hearthstone also has a proven track record of institutional and pension fund investments in the sector. 

It’s important to remember that returns are not guaranteed, and that past performance should not be used as a reliable guide to future performance.

As a PAIF, all of the fund’s income from property investment is exempt from corporation tax, which would normally be payable by an OEIC at 20%. This makes the fund very efficient for tax purposes and the investor is taxed upon the PAIF assets more or less as if they held those assets directly. This is particularly relevant for those investors holding the fund within tax-advantaged wrappers such as SIPP or ISA.

Whilst the unit trust feeder fund doesn’t have the same corporation tax exemption enjoyed by the PAIF share classes, it can also be held in a SIPP or ISA.

See the prospectus for more detailed information on taxation within the fund and taxation in the hands of the investor. This can be downloaded from the library.

The retail share classes in the main (PAIF) fund have an estimated OCF of 1.53%, and the unit trust feeder fund 1.63%. These details are correct as at 13th December 2019.

There is no initial charge for the unbundled retail classes.

A full list of available share/unit classes and their charging structures can be found in the library section of this site.