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Property yields

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Property yields

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									Life UK Property Fund
Providing the foundations for a stronger portfolio




Our JPM Life UK Property Fund is designed to help investors                                                                                                                                                               John Stuart Fund Manager
capitalise on the long-term capital growth opportunities                                                                                                                                                                                John is the portfolio manager of
                                                                                                                                                                                                                                        the Save & Prosper Property Funds.
presented by the UK commercial property market using a                                                                                                                                                                                  An employee since 1979, John has
                                                                                                                                                                                                                                        held overall responsibility for these
                                                                                                                                                                                                                                        funds since 1985. He was elected
relatively low risk strategic investment approach.                                                                                                                                                                                      an Associate (1978) and
                                                                                                                                                                                                                                        subsequently a Fellow of the Royal
                                                                                                                                                                                                                                        Institution of Chartered Surveyors
                                                                                                                                                                                                                                        in 1990.
Why invest in property?
Property yields have fluctuated greatly over the years. Yields fell sharply during the property
booms of the late 1980s and the early 2000s. However, with the fall of property values in late
                                                                                                                                                                                                                          Stephen Olton Asset Manager
2007, yields moved to much more attractive levels.
                                                                                                                                                                                                                                        Stephen joined J.P. Morgan Asset
Yields from UK retail investments (shops etc) are at historic highs, while office and industrial                                                                                                                                        Management in 1989 and has since
                                                                                                                                                                                                                                        then deputised for John Stuart and
yields are at their highest level since the late 1990s. With long-term value now starting to                                                                                                                                            held responsibility for the asset
emerge, investment in property could prove to be rewarding for investors looking to capitalise                                                                                                                                          management of the Save & Prosper
                                                                                                                                                                                                                                        portfolios. He has over 27 years
on today’s attractive property yields.                                                                                                                                                                                                  experience in the property industry
                                                                                                                                                                                                                                        having been a Member of the Royal
                                                                                                                                                                                                                                        Institution of Chartered Surveyors
UK property since 1987, initial yields                                                                                                                                                                                                  since 1977.

12.00

10.00

 8.00

6.00

 4.00

 2.00
                                                                       All Property                    Retail                 Office                     Industrial
 0.00
                                                                                                                                       Dec-00




                                                                                                                                                                             Dec-04
                                                                        Dec-93




                                                                                                                                                Dec-01
                                                                                          Dec-95
                                            Dec-90




                                                                                                                                                                                               Dec-06



                                                                                                                                                                                                                 Dec-08
                                                              Dec-92



                                                                                 Dec-94




                                                                                                            Dec-97
                 Dec-87




                                                     Dec-91




                                                                                                   Dec-96




                                                                                                                              Dec-99
        Dec-86




                                   Dec-89




                                                                                                                     Dec-98
                          Dec-88




                                                                                                                                                                    Dec-03



                                                                                                                                                                                      Dec-05
                                                                                                                                                           Dec-02




                                                                                                                                                                                                        Dec-07




Source: IPD, July 2009


Diversification and risk reduction
Property can be an attractive long-term investment – it can provide compelling capital growth
opportunities and has frequently performed differently to other asset classes, thus providing
a degree of portfolio diversification.
The low volatility of property returns and its historic low correlation with other asset classes
can also be attributed in large part to the fixed and regular rental income (between occupancy
reviews), which causes property investments to adopt bond-like characteristics. The property
market also reacts more slowly to economic change, which makes property returns less likely
than equities to be subject to substantial variations over any 12-month period. The lower
volatility of returns means the asset class can help pension funds better match assets with
long-term liabilities.
Life UK Property Fund



Proven track record                                                                                                         Key Fund Facts
The JPM Life UK Property Fund gains its exposure to the UK commercial property market through
the Save & Prosper Property Pension Fund. This Fund, which was launched in September 1972,                                  Fund managers                  John Stuart
has delivered an annualised average return of about 10% since its inception.                                                                               & Stephen Olton

You should remember that past performance is not a guide to the future. The price of                                        Launch date                    October 2006
investments and the income from them may fall as well as rise and investors may not get back                                Benchmark                      IPD Balanced
the full amount invested.                                                                                                                                  Monthly Index

                                                        5 Years              10 Years             Inception                 Minimum initial
                                                                                                                            investment                     £5 Million
 S&P Property Pension Fund                                5.5%                41.3%               3,233.0%
                                                                                                                            Currency                       GBP
 Annualised Average Return                                 1.1%                3.5%                 10.0%

Source: J.P. Morgan Asset Management. Data as at end August 2009, net of fees.


Adding value without taking excessive risk
The JPM Life UK Property Fund aims to add value through investing in a carefully selected
diversified portfolio of commercial real estate assets. Although the fund will maintain an open
strategy on where in the property market it might invest, it will initially seek to acquire
properties that will provide returns of between 5-8% per annum.
The fund managers will be looking for investment opportunities that are in fundamentally
desirable locations, but which may have some tenant risk attached or where there may be an
opportunity to add value through redevelopment, refurbishment or a change of use.

Research is key to the investment process
Our successful real estate investment process is founded on extensive research capabilities.
Since property is a specialist market and information flows are restricted it is important to have
a dedicated research team focused on acquiring the best insight into potential investments.
The research team’s focus is primarily on tenant demand and the related potential for rental
income to increase. Significant resources are devoted to acquiring the best possible information
and insight about the sub-sectors of the property market which are being considered for
investment.Views on trends and pricing are obtained and updated regularly.

Experienced management team is crucial
The fund is managed by the J.P. Morgan Real Assets team which has been running real estate
portfolios for over 30 years. The team, based in the UK, draws upon the resources of the
worldwide J.P. Morgan Real Assets team, benefiting from the knowledge of over 200 dedicated
and experienced investment professionals (including analysts, economists and portfolio
managers). The J.P. Morgan Real Assets team currently manages approximately £2 billion of
real estate assets in Europe.*
Since we recognise that research is the key when investing in real estate, the group has a                                   For further information contact your
dedicated research team that provides market research and portfolio construction analysis. The                               usual J.P. Morgan Asset Management
team has built relationships with many key real estate owners and operators in the UK which                                  representative
ensures that the fund’s managers obtain accurate insight into the real estate market and access
to opportunity on attractive terms.

*As at 30 June 2009.

Telephone lines are recorded and may be monitored for security and training purposes. Investments in funds of this nature are subject to specific risks arising from investment in
REITs and property related securities and investors should ensure that they fully understand these. A copy of the fund’s prospectus, simplified prospectus and key features document
are available free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated by
the Financial Services Authority and is part of the JPMorgan Asset Management marketing group which sells investments, life assurance and pension products. Registered in England
No. 288553. Registered office: 125 London Wall, London EC2Y 5AJ.
LV – JPM3078                                                                                                                                                                 09/09

								
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