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Will I ever be required to put in more money to cover costs etc?

No, you will never be asked to invest more into the fund for any reason.

Is TM home investor fund an ethical investment?

The positive environmental and social impact of the TM home investor fund has been recognised by 3D investing, powered by Ethical Money.

3D investing conducted thorough due diligence of the fund’s investment philosophy, process and team – with particular focus on assessing the intentionality of pursuing and embedding an active ESG strategy.

They summarised their views as follows:

“As its name suggests, this fund invests in residential housing focused on renting to lower income households. There is a real need for such housing, with a well-publicised national shortage of decent,

affordable homes. The fund seeks to acquire, let and manage houses with improved environmental standards, located near public transport in areas of low flood risk. Energy and environmental standards

of the fund’s housing stock are significantly above the national average, demonstrating the fund’s standing as ‘best in class’. “

A full copy of the report can be found in our library here, and you can find out more at www.3dinvesting.com

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Can I invest via a SIPP?

The TM home investor fund enables holding residential property within a Self Invested Personal Pension (SIPP), although this option is not currently available through the online portal provided by WealthKernel.

You can invest in a SIPP via many external investment platforms and SIPP providers.

Your financial adviser will also be able to advise you on how to invest in the fund through a SIPP.

Is my investment secured or guaranteed?

There are no guarantees that the value of your investment won’t fall, and we cannot guarantee how much you’ll make while you’re invested. Your investment returns are driven by the change in value of the properties, the rents paid by tenants, and the fund’s costs and charges. The fund is covered by the Financial Services Compensation Scheme which you can find out more about here.

When can I buy and sell the fund?

Under normal circumstances, you can buy or sell shares in the fund on any UK business day. If selling shares (‘cashing in’ your investment), the sale will normally be settled four business days later. If using the WealthKernel portal, the money will usually be cleared into your bank account after one additional business day.

The fund aims to hold 10% to 15% of assets in cash to cover withdrawals and also has a stream of rental income that can be used to meet withdrawals in the short term. Note that in unusual market conditions, there may be a delay in withdrawing money if properties need to be sold. For more information, see this page 

What am I investing in?

You’re buying into a residential property fund with many other investors. All investors’ money is pooled together and used to buy flats and houses of various sizes, which are then rented to families, individuals and companies. The properties are spread across England, Scotland and Wales and broadly reflect the UK (excluding Northern Ireland) housing market in terms of regional distribution and property type. TM home investor fund is actively managed, which means Hearthstone doesn’t just follow the market; our team of residential property experts have the flexibility to select only properties that are expected to positively impact the portfolio over the long-term.

Preference is for the fund to buy and hold properties for the long-term, although when necessary, it will sell properties that are not performing as well as expected. It tends to buy new or modern properties to keep maintenance and management costs as low as possible, and homes that will attract reliable long-term tenants in sought-after rental locations that also have an active re-sale market.

Alongside the property investments, around 10% to 15% of the fund is kept in cash to pay investors who want to cash in their investment. (Note that in unusual market conditions, there may be a delay in withdrawing money if properties need to be sold. For more information, see this page 

What does it cost?

Just like any other product or service, TM home investor fund is subject to charges and expenses which have the effect of reducing the potential returns of your investment. These include the costs of running the fund, as well as marketing and distribution costs.

The share class you can invest into through the online portal provided by WealthKernel has estimated ongoing charges (OCF) of 1.73% per year *. This includes the Annual Management Charge of 1.1% plus other estimated variable expenses incurred in operating the fund. The variable expenses depend on things like the number of investors in the fund, property valuation fees and legal costs.

Of the 1.1% Annual Management Charge, 0.2% is paid to WealthKernel as a product fee to manage the service they provide, which includes the administration of your investment on their portal as well as the ongoing reporting to you.

There are no initial charges made on your investment through the online portal, so all of your money is used to buy shares in TM home investor fund. However, the costs of buying or selling properties (such as Stamp Duty Land Tax, disbursements, estate agent and legal fees) are factored into the share price. More information can be found in the fund’s prospectus.

Different share classes are available on third-party investment platforms and through financial advisers. Not all share classes are available directly to retail investors. Other share classes may have higher or lower charges than that available through the WealthKernel portal, but the third-party platform or financial adviser will usually make a charge for the service and, if applicable, the financial advice provided. A full list of share classes can be found in the fund’s prospectus which you can contact us to obtain.

You may also contact us for an application form should you not wish to use any of the above methods to invest in the fund.

* OCF correct as at 13th December 2019.

What is TM home investor fund?

TM home investor fund is an affordable way to invest in private rented UK houses and flats, so you can enjoy the investment benefits of residential property, whatever your budget. The fund aims to grow your investment over the medium to long-term, using the professional buying power and property management expertise of Hearthstone’s team of residential investment specialists to maximise investment returns. Rental income, after property management costs and fund charges, is also reinvested into the fund.

By investing in private rented residential property, an asset class many are familiar with, the fund can offer a hassle-free and tax-efficient alternative to buy-to-let or help your money keep pace with property prices when saving for a deposit for your first home, or for your children or grandchildren.  It also offers real investment diversification in a portfolio of equities, bonds or commercial property because residential property acts differently to these other mainstream asset classes as market conditions change.

As for all investments, the value of shares in TM home investor fund can go down as well as up and you may get back less than you put in. Residential property values are affected by factors such as interest rates, economic growth, fluctuations in property yields and tenant default. Property investments are relatively illiquid compared to bonds and equities, and can take a significant amount of time to trade.