FUND SELECTOR PROPERTY FUNDS
Top ranked funds Newcomers
Top 3 performing new funds vs world index
50
40
30
20
%
10
0
-10
Jyske Invest Global Real Estate Equities
Sarasin Sustnbl Eqty - Real Estate Global
-20
Nov ’08 Jan ’09 Mar
Source: Morningstar
FUND PICKER’S COMMENT
TONY YOUSEFIAN, FUND
MANAGER, OPM FUND
MANAGEMENT
The list of newcomers is
dominated by funds with a
global mandate and largely
concentrated in the Reit
market. The majority of the
funds were launched in
2007 and early 2008, prior
to the full force of the
credit crisis. It is notable
that no bricks and mortar
funds were launched in the
period as investment
houses no doubt began to
see potential liquidity
issues.
While these funds have
delivered strong one year
returns to mid-November
this year, all are well below
the price at their respective
launches, reflecting the
dire conditions experienced
by the property
sector over the past three
years.
Of the funds listed, we
are a strong supporter of
M&G Global Real Estate Securities
May
Jul
MSCI World
Sep
Nov
the First State Asian Property
Securities Fund, which is a
key holding in our own CF
OPM Property Fund. The
fund is nimble with a little
under £10m under management,
and given First State’s
strength in Asian markets,
this holding could well add
significant value. It has also
provided a way for us to
gain exposure to the
Chinese developers, which
could potentially benefit as
government stimulus measures
filter through to the
property market.
In addition, the attractive
looking Chinese retail sector
is well covered in the fund,
with a sizeable holding in
Hong Kong-listed Hang
Lung Group.
While the majority of
the newer funds are very
similar in their global Reit
mandate, the one fund that
stands out as somewhat
different is the Sarasin
Sustainable Equity Real
Estate Fund.
This innovative vehicle
Top 10 newcomers – 1-year risk/return
Return (%)
50
40
30
Sarasin Sustnbl Eqty - Rel Est Glb
First State Asian
Property Sec I Inc
HSBC Open Global
Property Retail Acc
FUND ANALYSIS
■ Given the travails of the UK property market, commercial and
retail, it is no surprise that the majority of the new launches are
either Asian or global in mandate with all of the funds in this table
producing positive one year returns of between 19% and 43%.
■ Bank of New York Mellon launched its Global Property Securities
Fund in April 2008 and the majority of its current allocation is to
the US (35.7%) and Hong Kong (17.9%).
■ In terms of property types, its majority holdings are 31.2% in retail
and 30.1% in offices.
■ Rather than looking for typically ‘distressed’ companies, the Bank
of New York Mellon Fund favours firms that have already raised
capital to develop and acquire assets into the next market cycle.
is the world’s first property
fund to take into account
environmental criteria,
looking at sustainability in
construction products and
design.
It aims to combine the
skills of the Basel-based
sustainable research team
with the property knowledge
of London based
Sarasin & Partners.
The fund has been successful
over the year to 11
Nov, though it is still 25%
below its April 2007 launch
price. Only time will tell
M&G Global Real Estate Secs A £Inc
Jyske Invest Global
Real Estate Eq
Aviva Investors Global
Property SC1 Acc
20
Invesco Asia Pacific
Rel Est Secs A Acc
CF Macquarie Global
Property Sec A Acc
BNY Mellon Glbl
10
Sector average
Property Secs A $
Standard Life
Global REIT R Acc
2 3 4 5 6 7 8
Standard deviation (%)
To 11 Nov ’09. Bid to bid, $, gross inc. no cap. Source: Morningstar
whether the sustainable
approach will provide a
consistent long-term performing
investment, but
global political pressures
certainly do make this fund
one worth keeping an
eye on.
As far as the Global Reit
funds are concerned, much
depends upon macro asset
allocation. We look closely
at the holdings and geographic
split, and for us to
buy into a fund it must tie
in with our own internal
macro view.
“
While these funds
have delivered strong
one year returns to Top 10 property funds with less than a 3-year track record
mid-November this
year, all are well
Jyske Invest Global Real Estate Eq
1-year
% chg
43.24
1-year
Alpha
0.97
1-year
Beta
0.95
1-year
R²
0.97
1-year
volatility
6.16
Fund
size ($m)
7.04
Launch
date
11 Jun ’07
Domicile
Denmark
below the price at Sarasin Sustnbl Eqty - Rel Est Glb 34.38 0.3 0.96 0.73 4.9 35.9 2 Apr ’07 Luxembourg
their respective
M&G Global Real Estate Secs A £ Inc 34.23 0.38 0.83 0.87 5.4 19.18 11 Apr ’08 United Kingdom
launches, reflecting
First State Asian Property Sec I Inc
Aviva Investors Global Property SC1 Acc
28.7
28.69
0.51
-0.06
0.67
0.92
0.79
0.94
4.66
5.84
24.56
21.05
3 Jul ’07
27 Nov ’06
Ireland
United Kingdom
the dire conditions CF Macquarie Global Property Sec A Acc 23.98 -0.13 0.8 0.9 5.78 4.9 4 Jun ’07 United Kingdom
experienced by
BNY Mellon Glbl Property Secs A $ 23.49 -0.34 0.89 0.92 5.73 N/S 23 Apr ’08 Ireland
the property sector
over the past three
Standard Life Global REIT R Acc
Invesco Asia Pacific Rel Est Secs A Acc
HSBC Open Global Property Retail Acc
22.74
22.71
19.3
0.41
0.1
0.41
0.83
0.68
0.47
0.81
0.8
0.82
5.47
5.04
2.68
N/S
N/S
N/S
16 Jan ’07
31 Jul ’08
26 Nov ’07
United Kingdom
Luxembourg
United Kingdom
years
”
To 11 Nov ’09. Bid to bid, $, gross income, no cap. Source: Morningstar
30 PORTFOLIO ADVISER [www.portfolio-adviser.com] JANUARY 2010
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