Could property funds' woes spill over into multi-asset vehicles?

Concerns about contagion risk

Concerns have started to emerge about multi-asset funds' exposure to the beleaguered property sector, according to reports over the weekend.

Some of the sector's biggest providers, including SLI, M&G, Henderson, Aviva Investors, and Columbia Threadneedle, have suspended trading in their open-ended property vehicles amid a post-Brexit vote rush to exit the asset class. However, as reported in the Financial Times at the weekend, many groups that have suspended trading also offer separate multi-asset products that also invest in their parent companies' property funds, thereby adding to contagion risks. For example, two multi-asset products run by M&G have between 4%-7% of their assets invested in the company's property fund...