Fund Objective

The Standard Life Investments Select Property Fund aims to provide long term growth from a combination of income and capital growth.

View on Past Performance

The new year witnessed poor performance by the listed property market after a strong, but brief, recovery in the latter part of December. However, in a reversal from 2007, the UK property sector performed strongly. Overall, Europe recorded the best regional performance while Asia was the worst performer during January. Many listed property markets have moved to trade at significant discounts to underlying property valuations. Direct property returns in the UKThe Fund held up relatively well in difficult conditions over the month, aided by investment in opportunities with strong underlying fundamentals. In the UK, British Land, Land Securities and Great Portland Estates all rebounded strongly in January after a poor 2007, as did New York City office exposed companies Brookfield and Vornado.On the downside, Australia, China and Japan all underperformed. Australia fell back on technical issues, Chinese listed property sold off due to concerns about government plans to dampen the housing market, while Japanese REITs fell on concerns about the Japanese macroeconomic outlook.We took profits on UK Real Estate Investment Trusts (REITs) as we felt the sharp recovery went too far too quickly. We increased our exposure to US REITs, which performed well during the month. After a strong recent run, we took profits in the Hong Kong market, reducing our exposure. During January we increased our exposure to selected US REITs at attractive valuations.

Future Expectations

The outlook for global property markets remains positive, driven by continued, if slowing, economic growth in a controlled inflation and interest rate environment. We continue to focus on property markets which exhibit strong economic fundamentals coupled with favourable conditions in terms of vacancy rates and projected future development.Many listed property markets are trading at significant discounts to underlying property valuations, providing potential investment opportunities. We will also look to increase our global direct property investment in promising geographies such as Europe and Asia.

Fund Details