Funds Invested in European Property

The low interest rate environment continues to provide real estate companies with access to cheap debt. In the US, the macro environment has been favourable

Mathieu Caquineau, CFA 6 August, 2015 | 12:08PM
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Property stocks have rallied significantly over the past year, up 24%. But funds in the Morningstar Property category have returned 22.2% over this time – proving that beating the index is generally a hard task for managers in this asset class.

Property investors have to out-perform management fees and they often can’t invest in the smallest, less liquid holdings of their universe, particularly for those managing large pools of assets.

Rising Interest Rates Threaten Property Investment

The current low interest rate environment in Europe and the US continues to provide real estate companies with access to cheap debt. In the US, the macro environment has been generally favourable to the real estate sector but the threat of rising interest rates could be a headwind going forward.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AXAWF Fram Eurp Rl Est Secs A Cap EUR284.34 EUR1.98Rating
Schroder ISF Globall Cities A Acc USD221.80 USD1.32Rating

About Author

Mathieu Caquineau, CFA

Mathieu Caquineau, CFA  Senior Fund Analyst, Morningstar France

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