In this video update, Simon Hillenbrand, Head of UK Retail, summarises why the Janus Henderson UK Property PAIF and its Feeder Fund will change from being dual priced on a quoted-spread basis to being dual priced on a full-spread basis, with effect from 25 March 2019. Meanwhile, Ainslie McLennan, Co-Manager of the Janus Henderson UK Property PAIF, provides an update on portfolio positioning and her outlook for the asset class.

For further information on the change in pricing approach and pricing-related terms mentioned within the video, please read this investor letter and our simple guide to fund pricing.

Investor Letter A Simple Guide to Fund Pricing

Please note that the 2018 fund return mentioned in this video is for the ‘I’ share class. Please refer to the tables below for ‘A’ share class performance.

 

Key takeaways:

• The Funds currently change their pricing basis depending on whether they are growing in size (priced on an offer basis as a result of money from investors coming into the Funds) or shrinking (priced on a bid basis when, overall, investors take money out of the Funds).
• The Funds will change from being dual priced on a quoted-spread basis to being dual priced on a full-spread basis, with effect from 25 March 2019 to eradicate pricing basis changes
• Moving to pricing the Funds on a full-spread basis will mean that any purchases of shares/units in the Funds from 25 March 2019 will be at the quoted offer price, which because of the substantial costs incurred in buying properties (such as stamp duty land tax) currently is approximately 4.5% higher than the quoted bid price, the price at which investors can sell
• When we change our approach to pricing for the Funds, the price at which existing investors can sell shares/units will not be impacted as the Funds are currently being priced on a bid basis
• No further pricing basis changes will occur and price performance will better reflect the changes in the value of the underlying assets
• Overall, we believe the change will be in the best interests of long-term investors
• The investment process, the way the Funds are managed and the risk profiles of the Funds will not be altered by the change in pricing approach

 

Glossary of property related terms

Alternatives sector – includes assets such as cinemas, gyms, hotels, data centres restaurants and care homes.

Asset management – can include refurbishment work to improve valuations and attract a better quality of tenant, changing the planning use of assets to increase rental revenue, or renegotiating existing leases to extend tenancies.

Commercial property – Any property asset used for commercial purposes. Commercial property has three main sectors: retail, office and industrial. The market also includes the growing alternatives sector.

Yield – A measure of the percentage of income return you receive from a property investment. This is calculated as the gross annual rent generated by a property, divided by its current valuation.

Yield shift – Movement in the yield of a property asset, or like-for-like portfolio, over a given period.

 

Discrete year performance – Janus Henderson UK Property PAIF 

Share class	Dec 2017 – Dec 2018	Dec 2016 – Dec 2017	Dec 2015 – Dec 2016	Dec 2014 – Dec 2015	Dec 2013 – Dec 2014
A Acc	3.41%	8.03%	-4.88%	8.11%	11.55%
A Inc	3.50%	8.10%	-4.83%	8.02%	11.52%
I Acc	4.10%	8.74%	-4.26%	8.83%	12.28%
I Inc	4.17%	8.81%	-4.20%	8.77%	12.21%

Source: at 31 December 2018. © Morningstar, bid to bid, net of fees, gross income reinvested in sterling terms. Discrete performance data may change due to final dividend information being received after quarter end.

 

Discrete year performance – Janus Henderson UK Property Feeder Fund

Share class	Dec 2017 – Dec 2018	Dec 2016 – Dec 2017	Dec 2015 – Dec 2016	Dec 2014 – Dec 2015	Dec 2013 – Dec 2014
A Acc	3.39%	8.02%	-4.88%	8.11%	11.55%
A Inc	3.45%	8.07%	-4.85%	8.02%	11.52%
I Acc	4.08%	8.72%	-4.27%	8.83%	12.28%
I Inc	4.12%	8.78%	-4.23%	8.77%	12.21%

Source: at 31 December 2018. © Morningstar, bid to bid, net of fees, gross income reinvested in sterling terms. Discrete performance data may change due to final dividend information being received after quarter end.