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Biggest and Best Global Property Funds

Which global real estate funds have delivered positive returns for investors? And which property funds have swelled with inflows?

Fatima Khizou 17 November, 2015 | 10:01AM

3 Largest Global Real Estate Funds

The BlackRock ISF Developed Real Estate Index fund aims to deliver a total return that reflects the total return of the FTSE EPRA/NAREIT Developed Index, taking into account both capital and income returns. So far the fund has achieved this objective. It provides investors with an inexpensive, tax-efficient way to get broad-based global real estate exposure. This open ended index tracker has garnered most assets over the last few years in line with the general trend of increasing inflows into passives at the expense of active managers.

The Robeco Property Equities fund has a Morningstar Analyst Rating of Neutral and has been managed by Folmer Pietersma since October 2007. The team seeks to identify investment ideas within the space through an investment process that combines bottom-up stock picking with top-down analysis. The emphasis is on stocks with good earnings prospects and a reasonable valuation, with company management meetings also being a crucial part of the selection process. The main focus within the portfolio is on prime properties, representing around 65% of the total assets as of the end of June 2015.

The Franklin Global Real Estate fund’s management team is led by Wilson Magee who has been at the helm since 2010. They attempt to identify high quality REITs and similar REIT-like entities that tend to generate strong cash flows that comfortably cover their dividends. The managers use a combination of top-down macro analysis with bottom-up research, but the main focus is on stock selection.

3 Best Performing Funds Over Three Years

The Third Avenue Real Estate Value fund follows a value approach to investing in real estate and real estate related companies. The fund is managed by a well-resourced team of portfolio managers and analysts and the investment process offers greater flexibility to the team to identify attractive investment ideas within the asset class. The portfolio is diversified across key regions, sectors, market capitalisation as well as exhibiting a high active share. This approach has delivered attractive returns over the medium and long term.

The Brookfield Global Listed Real Estate fund is also amongst the strongest performers over three years. The fund was launched in November 2011 and has performed strongly since, resulting in a rapidly growing asset base. The fund is run by two experienced managers Jason Baine and Bernhard Krieg who take a balanced approach to investing, seeking to mitigate risk through diversification, credit analysis, economic analysis and review of sector and industry trends. Proprietary research is used to select individual securities that they believe can add value from income and/or the potential for capital appreciation.

The LGT Select REITS fund follows a different approach to investing in real estate securities than most of its peers, in that it constructs a portfolio of external fund managers rather than individual stock positions. This approach has led to distinct biases, with the UK representing more than 18% of the portfolio as the end of June 2015. Thus, prominent UK companies such as British Land and Land Securities Group are among the top 10 holdings. 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Brookfield GlbLstd RE UCITS $I Acc E41.45 USD-0.02
Franklin Global Real Estate A(acc)USD13.93 USD-0.18
iShares Dev Rl Ett Idx (IE) Flex Acc €18.65 EUR0.10
Robeco Property Equities D €189.58 EUR0.01
Third Avenue Real Estate Value A1 USD57.94 USD0.54

About Author

Fatima Khizou  is an Investment Research Analyst for Morningstar

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