Fund Objective

To provide real return over the economic cycle.

View on Past Performance

The fund outperformed global real estate, and our long-only fund by 3.2%. Positive performance came from Europe, and from healthcare-related holdings Ventas and Alexandria, and Public Storage. Simon Properties, Macerich, Regency Centres and Federal Realty - all US names contributed to performance as Retail was the second strongest sector. Sumitomo Realty of Japan, Stockland of Australia and Unibail-Rodamco of Europe also contributed.

Future Expectations

We feel the US outperformance may be unsustainable with the REITs up 0.8% YTD vs. the S&P 500 down 19%, despite the worst financial crisis since the Great Depression. US REITs fo not have to revalue their properties to market value, although transactions have slowed to a trickle with credit markets seized up; and when capital flows again and property starts trading at higher cap rates, we expect US REIT prices may fall.Offices also face headwinds as banks and related businesses shrink in the markets where prices have been keenest. Sectors with short leases like apartments may also suffer weakness.

Fund Details