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Intelligent fund management
Covered by the Financial Services Compensation Scheme
Diversify your portfolio
We know you want to expand your investment portfolio and you may be considering buy-to-let. You want your money to be looked after and to be managed intelligently, but also for it to work hard. In today’s unpredictable climate though, many investments can be complex and difficult to understand. Buying a house or being a landlord comes with its own complications too.
The UK buy-to-let market can be a complicated space. Mortgage applications, tenancy deposit laws, tax, tricky tenants and leaky taps. TM home investor fund takes the hassle out of property investment. From finding the properties across the UK, to letting, maintaining and the eventual re-sale of them, it’s all managed by Hearthstone's expert team, adding diversity to your portfolio and leaving with you with more time to spend doing the things you love.
Hearthstone's investment team understands the UK residential property market. The TM home investor fund has delivered attractive returns to investors since 2012.
You can make use of your ISA allowance to invest in the fund. There is no need to worry about recent tax changes imposed on buy-to-let landlords.
Become a property investor without even buying a house. So no leaky taps and tricky tenants for you then.
Questions? We’ve brought together some answers to the most frequently asked questions here.
Hearthstone Asset Management Limited, a subsidiary of Hearthstone Investments plc (‘Hearthstone’) is the Property Investment Adviser to the fund. Hearthstone is a residential property investment specialist, which was founded in 2009 as the UK’s first fund manager to focus solely on residential property. Supported by a highly experienced team, it has successfully brought a range of investment funds to market for both individual and corporate investors. Through close relationships with estate agents and housebuilders and careful property selection and management, Hearthstone aims to offer attractive, stable investment performance while providing excellent accommodation and landlord services to the growing number of households looking to rent.
The ‘TM’ in the fund’s name signifies that Thesis Unit Trust Management Limited (TUTMAN) is the fund’s Authorised Corporate Director and has overall responsibility for ensuring the fund is operated in accordance with the Financial Conduct Authority’s regulations.
National Westminster Bank Plc (NatWest) is the fund’s Depositary and is responsible for overseeing TUTMAN’s operation of the fund. NatWest is also responsible for the safeguarding of the assets of the fund and protecting the interests of incoming, outgoing and continuing investors.
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 1.81% 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.
There’s no lock-in period or minimum investment time. However, this should be considered as a medium to long-term investment of at least five years.
Compared with traditional buy-to-let investing, the fund compares favourably for the following reasons:
Lower risk: The fund offers greater diversification than buy-to-let, spreading the risk of property ownership across a large number of tenants, property types and locations, rather than it being concentrated in one or two properties in a single area.
Buying power: As a large investor, the fund is also able to acquire assets through bulk-purchases from developers at discounts to open market value, providing additional return to investors.
Value for money: The fund costs include all property management and maintenance as well as tenant liaison, making it hassle-free for investors, compared to a direct buy-to-let investment.
Tax efficiency*: Unlike direct buy-to-let, the fund can be held in ISA, SIPP, Offshore Bonds and trusts. Outside of these tax-advantaged wrappers, capital gains are not subject to the 8% Capital Gains Tax Surcharge which apply to buy-to-let properties. Buy-to-let investors also have to sell an entire property – perhaps worth hundreds of thousands of pounds – in order to realise any capital gain, whereas an investor in the fund could choose to cash in just some of their shares to keep within annual Capital Gains Tax allowances each year.
*Taxation information is based on Hearthstone’s understanding of legislation in force as at July 2018. Legislation may change, and tax and trust law may be open to differing interpretation. The impact of taxation will depend on individual circumstances. Potential investors should seek advice from their financial adviser or tax specialist before investing.
Now it’s simple to invest in residential property online in a tax-efficient ISA. Start today and make those savings goals a reality.