The Fund delivered one of its strongest monthly performances in October, returning 2.0% versus the benchmark’s 0.6%. This outperformance was largely driven by our non-index holdings in Gemlife Communities (GLF +10.7%), Qualitas Limited (QAL +8.58%) and Cedar Woods Properties (CWP +18.64%).
Portfolio Manager
Investment Specialist
A Property Fund focussed on capital security, income yield, and sustainable growth.
The Fund believes each security has an underlying or intrinsic value and that securities become mispriced at times relative to their value and each other.
The Fund seeks to exploit such market inefficiencies by employing an active, value based investment style to capture the underlying cashflows generated from real estate assets and/or real estate businesses.
The Fund believes that responsible investing is important to generate long term sustainable returns. Incorporating ESG factors along-side financial measures provides a complete view of the risk/return characteristics of our property investments.
The Fund is benchmark unaware. All positions are high conviction and assessed on a risk-reward basis, resulting in a concentrated portfolio of 10-20 securities.
1. Net performance figures are shown after all fees and expenses, and assume reinvestment of distributions. The Fund incepted on March 11th 2020. Index performance calculations include a complete month’s performance for March 2020. No allowance has been made for buy/sell spreads. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
2. Inception 11 March 2020.
3. Annualised standard deviation since inception.
4. Relative to S&P/ASX 300 A-REIT TotalReturn Index.
* For further information regarding fees please see the PDS available on our website.
COMMENTARY
It was a volatile month, with the sector giving back much of its earlier gains following higher-than-expected inflation data, which dampened market expectations for further rate cuts this year. The market now expects just one additional cut, likely early next year.
Regardless of the timing of the next move by the RBA, the macro backdrop remains supportive for REITs. Population growth continues to strengthen, capital values appear to have bottomed, transaction activity is rising, and development costs are easing, which is reflected in improving profitability for construction companies and stronger earnings growth across the sector.
Sector Highlights
We continue to believe the sector’s fundamentals are the strongest they’ve been in five years — with debt costs shifting from a headwind to a tailwind, capital values having bottomed, and demand for real assets underpinned by robust population growth. In line with this outlook, we have positioned the portfolio to favour the residential, retail, and data centre segments.