Global listed property fund managers under-perform benchmark
The last 12 months saw both major global listed property indices return over 25 per cent to November 2012, but most fund managers fell short of the benchmark, according to the Lonsec Global Property Securities Fund Sector Review.
The sector largely rebounded from the lows experienced during the global financial crisis, outperforming global equities by 8.6 per cent over the year and 8.7 per cent over a three-year period, Lonsec stated.
Despite this, the relative performance of funds was difficult to determine since a number of funds are benchmarked to different indices, Lonsec senior investment analyst Andrew Coutts said.
According to Lonsec, most funds were found to be defensively positioned, favouring large cap, high quality names.
"In general, larger REIT (real estate investment trust) players are thought to be better positioned from a risk perspective relative to their smaller counterparts," Coutts said.
"This is due to better access to funding at more attractive pricing — with lenders having adopted more stringent lending criteria — and the tendency for high quality property to be more resilient in periods of economic difficulty."
The review also found that with continued macro uncertainty, managers were continuing to focus on a ‘bottom up' research approach in their stock selection rather than taking large bets on particular sectors or regions.
Recommended for you
The possibility of a private credit ETF is looking unlikely for now with US vehicles seeing limited uptake, according to commentators, but fixed income alternatives exist that can provide investors with a similar return.
Ahead of the approaching end of the financial year, State Street has shared five tips for advisers who are using ETFs in their client portfolios.
The use of active ETFs in model portfolios by financial advisers is a key factor in the growth of the products for iShares, according to BlackRock.
Global asset manager BlackRock has identified bringing private markets to the wealth channel as a key business area for the firm that could generate US$500 million in revenue in the future.
