SUMMARY
The real estate sector is significantly undervalued after a sell off in September (-8.6%) and October (-5.8%) triggered by fears of higher bond yields putting more pressure on valuations and cost of capital.
Whilst further downside risk is possible, particularly for highly geared REITs, we see plenty of opportunities for investments in high-quality names with more favourable outlooks.
For the month of October, the Fund returned -4.7% outperforming the benchmark by 1.0%. This was attributed to our clear strategy to be underweight office and our significant exposure to non-index stocks.