Australian REIT managers struggle to outperform
The global real estate investment trust (REIT) sector has enjoyed stronger absolute returns over the 12 months to April but Australian REIT managers have been finding difficulty in outperforming the index, according to Zenith.
The research house found the global REITs remained currency unhedged and benefited strongly from the prevailing currency tailwinds.
Zenith analyst, Jonathan Baird said all of the active global property managers on Zenith's approved product list outperformed its benchmark.
"After discussing the outlook for the sector, many managers believe that in light of the rising US interest rates and a diminishing valuation tailwind, increasingly challenging environment will predicate the need for prudent and skilled active management," Baird said.
"Pleasingly global managers have increased the level of active risk in portfolios with managers more prepared to invest in smaller names or take off-benchmark positions."
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