UK property sector advisers’ favourite in Q3, AIC data shows

house key keys keyring home propertyThe Property Direct UK sector is the most popular sector among advisers in the third quarter of the year as investors shun open-ended property funds following the Brexit vote, research from the Association of Investment Companies reveals.

This accounted for 15 per cent of all investment company purchases on platforms, according to the AIC and it marked the first time the sector has exceeded a 10 per cent share of all purchases.

The third quarter also marked the second highest quarter on record for adviser and wealth manager purchases of investment companies via platforms with £179.7m of purchases. This figure represents an 18 per cent increase year on year and an 11 per cent increase in comparison to the previous quarter.

Growth in sales only reached its highest figure of £273.9m in the second quarter of 2015 when star fund manager Neil Woodford launched Woodford Patient Capital.

The next most popular sectors were UK Equity Income (14 per cent), Global (11 per cent), Infrastructure (8 per cent) and UK All Companies and UK Smaller Companies (each 4 per cent).

The AIC chief executive Ian Sayers says: “It’s telling that the Property Direct – UK sector was the most popular adviser sector in the quarter following the referendum vote. Given the problems experienced by the open-ended property funds at this time, more advisers have been recognising the benefits of holding illiquid assets like property in a closed-ended structure.”

Over £4.5bn flew from open-ended commercial property funds this year, according to Morningstar data.

Sayers adds: “The number of firms purchasing investment companies also rose to an all-time high in this quarter and this is reflected by demand for AIC training which is at record levels in 2016. We are planning to reach even more advisers next year with our new online training service.”