AVC contributions – important updateJune 21, 2016
The Prudential will soon be writing to the members who have an AVC fund invested entirely, or partly, in property. The letter will explain how this investment in property works. An extract of the information provided in the letter can found below.
Investing in property
Prudential’s funds invest in different types of property, for example: shopping centers, warehouses and offices. The returns from a property investment are made up of the changing value of each property, plus, assuming tenants can be found, rental income. The fund managers’ job is to get the best overall return they can, however both property values and any rental income can go down as well as up.
To maximise the eventual sale price, and the rental value, the fund managers maintain, develop or renovate those properties. The costs of doing this are called property expenses. These are paid for out of the overall performance of the fund and are in addition to fund charges that you pay. Previous expenses are already reflected in the current value of your investment.
The fund managers’ aim is to only spend this money when it is in the best interests of the investors in the fund. This means property expenses are likely to change from one year to the next.
What this means
If you have any questions, please contact the Prudential using the details shown below. You don’t need to take any action if you receive a letter.
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