Risk profiling service Distribution Technology (DT) has included Castle Trust’s HouSAs in its model portfolios after completing its research on the products which enable investors to access UK residential property.
The HouSAs – which include a Growth and an Income product – have been included with a 6% weighting in five of the 10 standard risk profiles on DT’s Dynamic Planner used by more than 5,000 investment advisers and wealth managers.
DT’s analysis showed how residential property changes the risk-return profile of portfolios and confirmed that residential property offers investors similar returns to equities but with lower volatility.
The full research and analysis is available to advisers and wealth managers on request from Castle Trust or from DT, which has risk profiled more than 400 funds from around 40 of the UK’s leading asset managers covering more than £50 billion in assets.
Phil Morse, director of asset management clients at Distribution Technology, said: “We have already shown that residential property provides good diversification to an investment portfolio so have included a 6% weighting for HouSAs in risk profiles two to six in Dynamic Planner to show how they can combine with other asset classes.”
Sean Oldfield, chief executive officer, Castle Trust, said: “We asked Distribution Technology, as the leading provider of risk profiling services for financial advisers, to show how the risk-return profile is changed by adding HouSAs to an investment portfolio. The results show just how it is improved and this will help advisers and clients to plan and manage their finances.”
Castle Trust’s Growth and Income HouSAs are suitable for ISAs and Junior ISAs and can be taken out for terms of three, five or ten years.
The capital value of the Income HouSA tracks any rise or fall in the Halifax House Price Index and pays an annual income of between 2% and 3%, depending on the term of the investment while the Growth HouSA offers a multiple of between 1.25 times and 1.7 times any increase in the Halifax House Price Index and limits the loss to between 0.75 times and 0.3 times any decline. Both are available for investments of between £1,000 and £1million.