Analysis of the 14 UK-focused funds in the IMA Property Sector over five years revealed returns in the sector varied from +1% to -26.6%, and average sector losses come in at 11.4%.
However, around one third of the 375 financial advisers surveyed still anticipate an increase in interest for these types of investments during 2013.
Sean Oldfield, chief executive officer at Castle Trust, said: “Property funds are not as liquid as they may seem. The reality is that investors try to sell when prices turn down, at which point they are locked in and then get the prices that can be achieved for the properties when allowed out.
"The idea that an open-ended fund can make illiquid assets liquid is misleading, as anyone who tried to sell a holding in a commercial property fund in 2008 will be aware.”
