Friday, September 30, 2005

Gear your SIPP investments

Investors in the Arc Sipp are to be offered an automatic gearing facility that uses holdings in the group's European Property Oeic as collateral to be reinvested in the fund.

The fund itself is able to gear as well but this is restricted to 10% of assets.

The facility is to be launched in April 2006 when pension rules change to allow gearing on any assets within a Sipp.

Charges on the Sipp, which is a white-labelled product from Pensions Associates Limited, include a set-up charge of £200 plus VAT and an annual fee of £300 plus VAT.

Managers of the property fund claim to have so far received commitments of £4.15m and expect it to top £50m within the next 12 months.

The fund, which was launched in June, has not yet made a property purchase. But once running it will be differentiated from the mass of property offerings which primarily target revenue from rental.

The Arc offering will be a trading fund that will buy and sell residential properties primarily in Spain although the fund has powers to make purchases across the whole of the EU plus Turkey and Croatia.

Therefore, the product will retain a cash holding of 20% for liquidity and investors will be able to exit on the first and third Tuesdays of every month. The minimum investment is £5,000.


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