Ruffer warns property fund liquidity problems could spread to other asset classes

Savers pushed into riskier investments

The managers of the £354m Ruffer investment company have said daily-dealing property funds have been shown to be a "contradiction in terms", and this phenomenon is likely to spread to other similarly illiquid asset classes such as corporate bonds.

Commenting after a number of property funds were suspended following the Brexit vote, they noted "the Central Bank put and miserly interest rates on cash" have pushed savers out of cash and bonds into riskier investments. "This has unintended consequences and in our view these chickens will come home to roost," they said. "The property fund promising daily liquidity has been revealed to be the contradiction in terms it was always bound to be and this phenomenon is likely to spread other similarly illiquid asset classes (eg corporate bonds). "Of course there is a reason for their hi...