Fund and Market Update: Review of 2020.
We take a slightly different approach to our update this month now that 2021 is firmly underway, and we have the opportunity to reflect on how Private Rented Sector residential property and the tm home investor fund performed in 2020.
Firstly though, despite the latest ‘lockdown’ measures in place across the UK, dealing in the Fund continues as usual.
The housing market remains very much ‘open for business’ across England, Scotland, Wales and Northern Ireland – unlike the situation in March last year. CBRE, the Standing Independent Valuer for the property portfolio of the TM home investor fund, has confirmed that it does not deem it necessary to apply a Material Valuation Uncertainty clause to its valuations.
2020: Resilience of residential property
After the unprecedented challenges caused by the Covid-19 pandemic and uncertainties surrounding Brexit ‘deal or no deal’ last year, we believe that private rented residential property has demonstrated its value as a diversifier in portfolios. We’ve produced a short presentation looking at how the Fund performed last year and the drivers behind that performance.
We also compare the residential sector with commercial property, and considers the benefits of combining the TM home investor fund with other property sectors.
2020 will be seen as a defining year for the sector: institutional investors were seen to increase their allocations to residential through the year, attracted by resilient capital values, security of income, low volatility, and low correlation with other asset classes – characteristics which can also benefit retail investors in their own portfolios.
The document can be downloaded by clicking on the image above.
There was no change in property valuations in the fund for December as the Standing Independent Valuer had limited transaction data on comparable ‘mid-market’ properties due to the Christmas break, and market activity being dominated by the prime end of the market which benefits most from the current Stamp Duty Land Tax (SDLT) holiday.
Rent collection remained strong for the month with 98% of rent demanded being received.
More detail on the portfolio and performance data is contained in the factsheets which can be downloaded by clicking on the image above.
A detailed list of the Fund’s property portfolio and cash holdings is aalso available in the Portfolio Summary document.
This document is not a prospectus, invitation to invest or advice. Investors may get back less than the amount invested. Information on past performance is not necessarily a guide to future performance. The value of investments in the fund can go down, and there can be no assurance that any appreciation in the value of investments will occur.
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.
Hearthstone Investments Ltd is the parent company of the Hearthstone Investments Group. Regulated business is carried out by Hearthstone Asset Management Limited. Hearthstone Asset Management Limited is an appointed representative of Thesis Asset Management Limited which is authorised and regulated by the Financial Conduct Authority (114354). Hearthstone Investments Ltd (06379066) and Hearthstone Asset Management Limited (07458920) are both registered in England and Wales. The registered office for both companies is c/o Waterstone Company Secretaries Ltd Third Floor, 5 St. Bride Street, London, United Kingdom, EC4A 4AS.
Thesis Unit Trust Management Limited is the Authorised Corporate Director of the TM home investor fund. Authorised and regulated by the Financial Conduct Authority (186882).