Which AREITs helped during market instability?
Australian Real Estate Investment Trusts (AREITs) were a reliable defensive asset class and avoided much of the market instability over the last year.
According to data from FE Analytics, the ACS Property – Australia Listed sector returned 24.02%, year to 29 November, 2019.
The top five performing funds in the sector were UBS Property Securities (33.27%), AMP Capital Property Securities (30.89%), AMP Capital Listed Property Trusts (30.86%), VanEck Australian Property ETF (exchange traded fund) (30.58%) and Pendal Property Securities (30.55%).
UBS Property Securities’ top holdings were Goodman Group (18.88%), Scentre Group (12.97%), Mirvac Group (12.79%), Dexus Property (9.27%) and GPT Group (6.21%), as of October 31, 2019.
AMP Capital Property Securities’ top holdings were Prologis Inc (4.64%), Welltower (3.46%), Mitsui Fudosan (3.22%), Alexandria Real Estate Equities (3.16%) and AvalonBay Communities Inc (2.78%), as of 30 September 2019.
AMP Capital Listed Property Trusts’ top holdings were Goodman Group (22.08%), Dexus (12.58%), Mirvac (11.29%), Scentre Group (9.76%) and GPT Group (8.47%).
VanEck Australian Property ETF’s top holdings were Stockland (10.76%), Goodman Group (10.37%), Mirvac Group (10.33%), Vicinity Limited (10.02%) and Charter Hall (9.57%), as of October 31, 2019.
According to its most recent Property Securities fund fact sheet, UBS said despite an uncertain global economic and political climate, the AREIT sector remained well placed.
“The structured rental increases and longer lease length combined with a tailwind of falling interest costs have helped the AREIT sector to provide and reaffirm a steady outlook for earnings and dividend growth of 4% for FY20,” it said.
“The AREIT sectors 4.6% forecasted dividend yield compares favourably to local cash rates at 0.75%, with potential to move lower.
“This yield and earnings stability are likely to remain attractive against the backdrop of a softening and uncertain Australian and global economic outlook.”
Best performing ACS Property – Australia Listed funds from the year to to 29 November 2019
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