These funds are essentially equity unit trusts that invest primarily in property unit trusts (PUTs) and property loan stock (PLS) companies.

Gerald Nelson, of the Association of Property Unit Trusts, says that because the funds invest in listed property they deliver a secure, high and growing income stream derived from contractual property rentals and capital growth.

"Listed property consistently outperforms other asset classes and provides higher yields than other income generating unit trusts such as gilt or money market funds."

Funds are actively managed by a team of experts who stockpick on an investor's behalf, he says.

In addition, the funds control risk through diversification and investment in a number of listed property entities.

Risk is further reduced through the introduction of an element of cash or short-dated money market instruments to protect income and capital during times of property weakness, says Nelson.

Association of Property Unit Trusts chairman John Rainier says the case for including listed property in an investment portfolio cannot be ignored. "It brings stability and is negatively correlated to the stock market, providing excellent risk diversification."