American money manager BlackRock has launched a new property-focused exchange traded fund (ETF), which will aim to reflect the risk and return profile of UK real estate.
The new iShares MSCI Target UK Real Estate UCITS ETF will track an index comprising real estate investment trusts (REITs).
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The fund manager said that it would "reduce volatility by giving higher weightings to lower volatility stocks" and would use the balance sheets of Reits to calculate the average proportion of debt across the Reit portfolio.
The new ETF would allocate inflation-linked government bonds to lower leverage and provide inflation protection.
Tom Fekete, head of product development for iShares in Europe, the Middle East and Africa, , remarked, "Hamstrung by high barriers to entry, direct investment in real estate is not always a viable option, and this is particularly the case for those investors with a small amount of capital to invest.
"Our fund aims to mitigate these issues in a cost-efficient manner, and offer instant access to an asset class that is otherwise considered to be illiquid."
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