+44 (0) 20 3301 1300 info@hearthstone.co.uk

Portfolio guidelines

The guidelines for the overall Fund portfolio are:
 
  • At least 85% of the portfolio should be invested in residential property. The remaining 15% is held for liquidity purposes in a combination of cash and other liquid investments. These are carefully planned such that, taken as a unit, they will broadly reflect the returns of an ungeared physical residential property investment. This is achieved by holding a basket of residential related equities such as house builder shares or limited holdings in other collective investment schemes and combining with a cash holding to reduce volatility.
  • No gearing will be employed. There is potential for an undrawn credit facility of 10% of Fund size available for periods of excessive redemption pressure, used to bridge redemption points through to underlying property sales.
  • The portfolio will normally be invested according to the regional and type distribution of value of the UK housing stock. For example, around 20% of UK housing, by value, is held in property in London; to better track the performance of the UK housing market the Fund will aim to invest 20% by value in London. Approximately 50% of London housing is flats: the Fund will aim to hold the same proportion in its holdings in that region. The Fund will also aim to invest in assets that are representative of the region by price, with a Fund average house price not exceeding that of the UK mainland market, taken as a whole.
  • The Fund will invest primarily in low-maintenance, new build properties in areas with high rental demand and a history of strong capital growth. Properties will be selected on a long term ‘buy and hold’ strategy, although the Fund has the flexibility to divest underperforming parts of the portfolio, as well as scaling up others. Trading and “churn” will be minimised while maintaining an appropriate divestment strategy for non-performing assets.
 
These guidelines are not absolute and the Fund may temporarily deviate from the above allocations should investment circumstances dictate. By virtue of being an actively managed fund, the portfolio of assets that the Fund holds is able to avoid properties with a negative growth profile or a high probability of poor future performance, unlike the LSL Acadametrics UK house price index. This flexibility allows the manager to select only stock that will positively impact the portfolio performance and increase the likelihood of outperforming the Fund’s benchmark.
 
PAIF investment and borrowing restrictions also apply, and are outlined in the prospectus.

Register for updates

If you would like to receive updates regarding Hearthstone Investments, or to receive our newsletter, please provide your details and particular area of interest below.

Terms and conditions

Hearthstone Disclaimer

Please agree to the terms below to view content in the 'Intermediaries' section.

Hearthstone Investments PLC is the parent company of the Hearthstone Group. Regulated activities associated with the TM Hearthstone ICVC are carried out by Hearthstone Asset Management Limited, which is an authorised representative of Thesis Asset Management plc, authorised and regulated by the Financial Conduct Authority (114354). Other companies in the group provide investment advisory and other services funds aimed at professional clients. Details of these companies are provided in the investment materials associated with each fund.

Information in this section of our website is intended for professional clients and investment professionals and should not be relied upon by retail investors. No information in this website should be treated as an invitation or inducement to invest in any investment product nor as investment advice. If you are a professional client or investment professional you should not provide retail clients with access to information from our website that is not specifically designed by us for their use. Neither Hearthstone Asset Management Limited or Thesis Asset Management PLC accept any responsibility for your use of this site other than in accordance with these terms.

You will not be prompted for up to 30 days for content in this section. You will be prompted again if you use a different computer or delete your internet browser cookies.