The Fund delivered another strong month, returning 6.2%, outperforming the benchmark return of 4.9%.
Key contributors to performance included our high-conviction non-index holdings, such as Cedar Woods Properties Limited (CWP, 16.07%) and Qualitas Limited (QAL, 14.52%).
Over the 12 months to May 2025, the Fund delivered a return of 13.1%, exceeding the benchmark by 0.97%.
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
The sector appears well-positioned heading into FY26. We anticipate a positive tone from REITs during the upcoming reporting season in August, supported by a macro environment that is increasingly favourable for NTA and earnings growth. We expect two additional RBA rate cuts this year. Although the yield curve has recently steepened, we see 10-year bond yields trending lower, creating further opportunities for inorganic growth, particularly for REITs with a strong balance sheet and competitive cost of capital. Overall, we expect this to drive more activity in terms of acquisitions, asset recycling, buybacks, consolidation and for REITs with the right cost of capital, new equity issues. We are already seeing early signs of a recovery in transaction activity and expect earnings momentum to build gradually.
We maintain a positive outlook on the residential sector, underpinned by several factors. These include falling interest rates, strong government initiatives at both the Federal and State levels, robust employment, and a structural undersupply of housing. Together, these dynamics are expected to drive improved sentiment and renewed momentum across the broader residential market. Within this context, we particularly favour the more affordable housing products offered by Cedar Woods Properties (CWP) and Aspen Group (APZ). Both companies offer high earnings visibility, supported by solid presales, and a diversified mix of products that are well located in markets with strong underlying growth fundamentals.
Goodman Group (GMG)’s year-to-date underperformance enhances its appeal in terms of valuation, with strong upside driven by a growing data centre pipeline that should support development profits, AUM growth, and co-investment opportunities.
The Fund continues to favour REITs that have exposure to sectors with long-term structural drivers such as data centres, manufactured home estates, self-storage and real estate private credit. The Fund currently maintains a 21% allocation to the alternative real estate sector, well above the benchmark’s 7%. This overweight position offers enhanced diversification and contributes to greater earnings stability. The Fund’s current portfolio holdings have an aggregate distribution yield of 6% and forecast earnings growth of 7%, supporting a strong total return for the Fund in FY26.