Which clients should invest in TM home investor fund?

As residential property tends to have low correlation with other mainstream asset classes, the TM home investor fund can provide a useful way of diversifying your clients’ wider investment portfolios. There are many institutional investors who have invested pension fund money for this very reason. 

Investment in the TM home investor fund can also be useful for clients with a particular goal in mind: first time buyers saving for a house deposit, parents and grandparents wanting to help children onto the property ladder, expats aiming to keep a toe in the UK housing market, people looking for a hassle-free alternative to buy-to-let, retirees seeking a regular income – as well as other more general investment aims.

What are the minimum and maximum investments?

The standard minimum investment levels for the retail classes are £50 per month or £1,000 lump sum. These minimums are usually waived via platforms to allow for rebalancing and adviser/platform fees.

There is no upper limit for private individuals but, as the fund is a PAIF, no single corporate investor can hold more than 9% of the PAIF’s shares. Corporate investors who wish to invest larger amounts may do so via the feeder fund.

How do I invest?

You can invest in the fund directly or through a SIPP, ISA, Junior ISA or Lifetime ISA via many investment platforms. A guide to platform availability can be downloaded from the library.

Application forms are also available in the library section. These can be used for direct investment, and by non-platform SIPP trustees or ISA Plan Managers.

How quickly can shares be sold?

You can apply to cash-in your client’s investment in retail share/unit classes on any UK business day and, under normal circumstances, the deal will be settled on a standard T+4 basis. 

Institutional class redemptions only deal on the first day of a calendar quarter with a notice period. (Note that while retail classes are deemed non-complex for MiFID II, institutional classes are deemed complex because of the redemption restrictions). Please contact us for more information.

In unusual market conditions, there may be a delay in withdrawing money if properties need to be sold. However, liquidity of residential property is typically much higher than commercial property due to far smaller unit values and the greater number of transactions that take place in the residential market. To further reduce this risk, the fund aims to hold  10% to 15% of assets in cash and other liquid assets and has a steady stream of rental income that can be used to meet redemptions in the short term. The fund buys properties outright with cash and does not use gearing, so there’s no debt to be serviced by the cash held by the fund.

What is TM home investor fund?

TM home investor fund is an affordable, tax efficient investment in carefully selected UK private rented houses and flats. Using professional buying power and expert residential property management, the TM home investor fund aims to deliver rental returns and capture UK house price growth so your clients can enjoy the investment returns of Private Rented Sector residential property whatever their budget.

Through the fund, you can diversify clients’ investments by allocating part of the portfolio to a, familiar asset class that has low correlation to equities, bonds and commercial property.

TM home investor fund has a track record since 2012 of delivering attractive returns with low volatility. 

How long are funds committed for?

There’s no lock-in period or minimum investment time. However, this should be considered as a medium to long term investment.

Why should I invest my clients in this fund?

The TM home investor fund can be invested in on a stand-alone basis, or as part of a diversified portfolio

  1. Stand-alone investment: 
    • Alternative to Buy-to-let: with recent tax and regulatory changes to Buy-To-Let, the TM home investor fund is a tax-efficient and hassle-free alternative.
    • Saving for a deposit: The TM home investor fund aims to capture UK house price growth; as such, the fund could be attractive to investors saving for a deposit, whether these are first time buyers, or savers trying to help their children, grand-children, friends or relatives to get on the housing ladder 
  2. Diversifier in a multi-asset portfolio: Thanks to low correlations to equities, bonds and commercial property, the TM home investor fund can fit in a diversified, multi-asset portfolio to improve risk-adjusted returns.