Investment boutique Bespoke Financial Consulting (BFC) has launched the first-ever fund which tracks returns on the benchmark Investment Property Databank ( IPD) All-Property index and is backed by the countrys commercial property derivatives market.

Bespoke said its IPD UK Monthly Index Tracker Fund was an open-ended fund aimed at both institutional and retail investors, providing exposure to property worth almost £50bn, and a mechanism to get in and out of the fund on a daily basis.

In a first for UK private investors, the BFC fund shadows the performance of the IPD, which comprises more than 3,500 retail, industrial and office properties from all over the UK.

“Our product effectively reduces volatility, as the Fund simply tracks the performance of UK commercial property, reflecting the capital values and income from a large number of properties held by a range of investment companies and fund managers”, said Gilbert.

The Fund pays income half yearly, reflecting the rental payments made in respect of the property portfolio. Income is paid as interest rather than a dividend payment - if investors do not pay tax or invest through an ISA, all of the tax deducted at source can potentially be reclaimed.

A spokesman for Bespoke said the fund had raised £8m so far but was targeting more than £100m by the end of next year.