Data from FE Analytics shows that 28 funds in the four mixed investment sectors have more than 5 per cent of their cash invested in property, and 11 have 10 per cent or more.
A large amount of the holdings are overseas, reflecting a generally bearish view on the asset class in the UK among professional investors.
However, some managers have stuck with UK property despite lacklustre returns, waiting for the moment it will rebound.
FE Trustnet takes a look at the property funds that are still being held in some of the UK’s top multi-asset portfolios.
Fidelity Multi-Asset range
Fidelity’s asset-allocation director Trevor Greetham (pictured) has 14 per cent of the £569m Fidelity Multi Asset Growth fund in property and 7 per cent of his £669m Fidelity Multi Asset Strategic fund.
His £12m Fidelity Multi Asset Allocator Growth and Fidelity Multi Asset Allocator Strategic funds, both launched in late 2011, have 14.2 and 5.3 per cent in the asset class respectively. Greetham prefers passive instruments for his property exposure on the latter two portfolios.
The BlackRock CIF Global Property Securities Tracker makes up 10.3 per cent of the Growth fund and 4.3 per cent of the Strategic fund. The iShares FTSE EPRA/NAREIT Developed Markets Property ETF makes up 4 per cent of the Growth fund and 2.7 per cent of the Strategic fund.
Performance of funds over 2yrs
Source: FE Analytics
Data from FE Analytics shows they have both performed well over the past two years, as have the globally focused property share funds in the IMA Property sector.
Thames River multi-manager
Gary Potter and Rob Burdett, managers of the Thames River Distribution fund, also use global equity funds to get property exposure.
They hold Schroder Global Property Income Maximiser, which has made 16.4 per cent in a year, underperforming its FTSE EPRA NAREIT Developed Index.
Thomas See uses the same covered call options on the fund to boost its income as he uses on the Schroder Income Maximiser fund, which FE Trustnet examined in a recent article.
The options help boost the payout of the fund to 6.21 per cent, while Thames River Distribution is currently yielding 4.8 per cent.
REITs
Many funds prefer to hold real estate investment trusts (REITs) rather than open- or closed-ended funds for property exposure.
REITs are property companies that are afforded tax breaks by the government for committing to pay out 90 per cent of their income to investors.
David Jane, manager of the TM Darwin Multi Asset fund, holds Suntec REIT and the CapitaMall Trust, both Singaporean REITs that trade on the local stock exchange.
REITs have offered a method of gaining access to UK property since 2007. FE Alpha Managers James Sullivan and Martin Gray have long held a position in them in their CF Miton Special Situations fund.
However, Sullivan is considering selling out of the assets on valuation grounds.
He said: "Our position is under review. When we bought our stock in British Land and Land Securities, we bought them at the nadir of the market in 2009."
"At that time, the REIT sector was trading at a discount to NAV and over the past four years we have seen a contraction in those discounts."
Performance of REITs over 5yrs
Source: FE Analytics
"The shares have done well but we think they have made their gains and we would question whether a 3.5 to 4 per cent yield is enough compensation for the risks."
"We had a 10 to 12 per cent weighting originally but we have 6 to 7 per cent today and that position is under review."
Graham Spooner, investment research analyst at The Share Centre, says that he still likes British Land, although he is growing more cautious on the stock on valuation grounds.
Few managers like to hold UK property, but there are some funds that spread the risk with exposure to equities and foreign buildings.
"If I was going to hold a property fund at the moment, my preference would be a real estate securities fund with a more global remit, rather than a direct UK property vehicle," said Bestinvest’s Jason Hollands.
"TR Property Investment Trust is trading at a discount, is 60 per cent invested outside of the UK and is a well-managed trust."
TR Property Investment Trust is currently yielding 3.68 per cent, according to data from FE Analytics, and has made 22.52 per cent over five years and 33.32 per cent over three.