Defensive during the pandemic
Being defensively positioned before and during the worst of the pandemic has helped the Quay Global Real Estate fund win the Global Property Securities category at this year’s Money Management Fund Manager of the Year awards.
The fund, which employed a deep research process, said it rotated towards the sectors and stocks least affected by COVID-19 in April last year. Justin Blaess, principal and co-portfolio manager with Chris Bedingfield, said at the time the risk of the pandemic became apparent, the fund reduced holdings in sectors such as senior housing and student accommodation and increased its exposure to data centres and life science office, those sectors with much lower impact from the global pandemic.
According to Blaess, sitting at the real asset end of global equities offered investors long-term real estate returns that actually outperformed global equities over the long term and with lower risk.
“This is because land is a store of wealth and does not suffer the same level of obsolescence and/or creative destruction as general equities,” he said.
“We think the outlook for returns is positive. There are still many pockets of value where fundamentals are still improving and our positioning has been to rotate away from overvalued sectors such as industrial and increase our weighting to sectors such as senior housing and retail landlords, where prices are still well below pre-pandemic levels yet in many instances the fundamentals are better.”
The judges also highly commended the IOOF Strategic Global Property fund, which was aimed at investors seeking long-term growth and access to property-related income streams by gaining exposure to a diversified portfolio of predominantly listed Australian and international real estate securities.
IOOF’s head of property, Simon Gross, said: “At IOOF we have the advantage of a specialist, internal property team that have selected a group of first-class global real estate investment trusts (REIT) managers with a variety of complimentary styles.
“This has led the portfolio to deliver strong relative returns over most years and great outcomes for our clients.”
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