Canlife UK Property Funds: Questions and Answers

The following funds were affected: 

• Canlife UK Property Life Fund
• Canlife UK Property Pension Fund
• Canlife UK Property Income Pension Fund (available in the Retirement Account only)

 

All of these funds invest mainly in the LF Canlife UK Property ACS, which has now removed the 185-day notice period on trade requests. This meant that we had, in turn, had to delay withdrawals from these funds for up to six months.

We have begun to action trades in line with the queue of instructions from customers and/or their advisers.

Yes, although as commercial property is a long-term hold / illiquid asset class we don’t expect a significant volume of trading.

No.

No.

At the time the policy was sold to you, your professional adviser should have assessed your investment objectives, your appetite for investment risk, and your ability to absorb potential loss. The adviser should have used the information to recommend funds appropriate to your investment needs. The circumstances in which Canada Life may delay valuations, fund switching, and paying claims are set out in your policy provisions.

LFS is the authorised contractual scheme manager of the LF Canlife UK Property ACS and carries out all fund administration, which includes placing dealing instructions, providing statutory literature and taking calls in relation to the LF Canlife UK Property ACS.

After the sudden sharp property market downturn in the first half of this year as the pandemic took hold, there is still much uncertainty ahead for the economy and property markets. We expect the property market downturn to continue into Q3, with a slow recovery anticipated from Q4 onwards, led by the industrial and office sectors, while the retail sector is forecast to continue to see negative performance until the end of 2021. External property consultant PMA are forecasting total returns at the All Property level to fall by c. 10% in 2020 in their main ‘Recession’ scenario, followed by a modest recovery of 0.7% in 2021.

The strategy for the LF Canlife UK Property ACS will be to continue to target an income yield of c.5.0% from property assets, as well as capital appreciation through active asset management. We will continue to reduce our exposure to the high street retail sector and will focus on acquiring longer-income stock with a particular focus on the industrial sector, together with some added-value stock in the office and industrial sectors.