After a week of woes for U.K. commercial property funds that pushed the pound towards a 31-year low, analysts and industry experts have pointed to a flaw in the design of these funds.
"Open-ended funds are simply not suitable for illiquid assets such as commercial property," Danny Cox, a chartered financial planner at Hargreaves Lansdown, told CNBC via email.
Cox explained that during the good times the money floods in and managers buy properties that they may not want – but as money washes out, they become forced sellers.
"Close-ended funds are much more suitable to gain exposure to commercial property, but even then they aren't perfect," Cox said.
An open-ended fund functions like a collective investment scheme that can issue and redeem shares at any time; however a closed-ended fund works like a publicly traded company that is a structured, listed and traded like a stock on a stock exchange.