MerrillLynch Investment Managers plans to launch a new wholesale property fund in the third quarter of this year, which combines both direct and listed property assets.
Paul Healy, director of property at Merrill Lynch Investment Managers, says the new product, which will be called the Merrill Lynch Combined Property Income Fund, will give investors access to the best of both worlds.
The product will allow investors to gain greater diversity by buying units in both the Merrill Lynch Property Trust, which invests directly into property, and the Merrill Lynch Security Fund, which invests in listed property trusts. Both have 10 year track records.
Both listed and unlisted property have been top performing assets in recent years, and while Healy does not expect to see the same levels of returns in the medium-term, he does believe that returns from property will still be healthy relative to bonds and cash going forward.
“Despite weakness in selected parts of the property market, property yields of seven to nine per cent on average are highly attractive from a risk/return perspective, and we believe the sector still warrants inclusion in a diversified portfolio,” Healy says.
