Trusts vs open-ended: How has UK property fared?

UK property has been regaining popularity with investors as an asset class but with a wide range of both open and closed-ended funds available in the space which type of vehicle has been delivering the best performance for investors?

The IMA Property sector currently features 13 funds with a focus on UK bricks and mortar. Performance for the overall sector, which also includes funds investing in property outside of the UK market, has reached 6.89 per cent year to date.

Property also proved the highest selling open-ended sector with investors in May 2014, according to figures from the IMA.

The best performing Oeic year to date, and the only UK bricks and mortar fund to outperform the broader IMA sector, is the £792m Standard Life Investments UK Property fund which has returned 7.38 per cent since the start of this year.

UK property fund performance YTD 1

This is followed by the Scottish Widows Investment Partnership Property Trust, which is the largest open-ended UK property fund at £3.03bn, with returns totalling 6.38 per cent.

The second largest UK property fund, the £3bn M&G Property Portfolio, also proved the third top-performing fund so far in 2014 after returns reached 6.33 per cent year to date.

The worst performing open-ended vehicles year to date have been the Old Mutual Property and the £1.9bn Henderson UK Property funds which have both returned 5.03 per cent to investors since the start of the year.

UK property performance YTD 2

The £446m Old Mutual Property fund is also ranked in the bottom five worst-performing funds in the IMA sector over one and five years.

The AIC direct UK property sector may have underperformed the broader IMA Property sector with returns totalling 6.67 per cent. However a number of investment trusts in the sector have actually managed to significantly outperform their open-ended counterparts.

The SLI Property Income Trust proved the best performing investment company in its sector, as well as being the largest UK property trust, with returns reaching 12.04 per cent year to date.

It also beaten its fellow SLI fund and top performer in the open-ended sector, the SLI UK Property fund with returns of 7.38 per cent.

The Picton Property Income, Standard Life UK Commercial Property and Schroder Real Estate Investment Trust all achieved higher returns than the best-performing open-ended fund with returns of 11.70 per cent, 9.51 per cent and 7.76 per cent respectively.

UK property trust performance YTD

The F&C Commercial Property trust has proved the worst performing UK property investment company so far in 2014 despite being ranked amongst the five best performing property trusts over one and five years, according to data from FE Analytics, with returns totalling 4.01 per cent year to date.