July, 2022
A higher than anticipated U.S. June inflation figure weighed on markets early in the month, but gave way to optimism that the point of peak inflation and rate hikes had passed. With economic data starting to skew negative mid-month and with more cautious corporate outlooks, the second half of the month saw a “bad news is good news” theme at play as investors bet that slowing growth would force the Fed to start cutting rates by early next year. Global equity markets (MSCI World) stabilized and staged an 8.0% rally off their lows. Global property stocks (FTSE EPRA/NAREIT Developed NTR) performed in line with equities, while both asset classes outperformed global bonds (Bloomberg Global Aggregate, 2.1%). The U.S. 10-year bond yield ended 46 bps lower. The Eurozone was the strongest performer. The Americas trailed modestly behind. APAC lagged.
Exposure to global industrial (U.S., Australia, and U.K.), U.S. lab science office, and preference for U.S. coastal apartments contributed, with the main driver being strong earnings results. Underweight to disappointing quarterly results in U.S. data centers was beneficial. With Continental Europe generally boosted by the reopening of a Russian gas pipeline to the region, overweights to France and Spain contributed. Underweight to strong performance from Swedish stocks due to solid results was a top detractor, as was underweight to U.S. malls, which rebounded after selling off year-to-date.
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From December 2018, the performance data shown is based upon the Fund's official Net Asset Value (NAV) prices. The performance data shown is net of fees and other charges but excludes any potential entry/exit charges- as such the return an investor receives may be lower. Prior to 31st December 2018, the data performance calculations reflect the month-end market close prices of the Fund's assets. After 1 January 2019, the performance data shown is based upon the Fund's Net Asset Value (NAV) prices of the last Irish business day of the month. For Funds not open for dealing on this day this will be an indicative NAV. As a result, it is possible that the stated
performance and the actual investment returns available to investors will differ. The performance information reflects performance of the D2 Class income units. Periods over one year are annualised. Investors should obtain their own independent tax advice. **Outperforming the FTSE EPRA NAREIT Developed NTR Index is not specifically included in the objective for the Fund, and the figures shown in the table are provided as a comparison only. Past performance is no guarantee of future results.
All Figures shown in this document are in U.S dollars unless otherwise noted.Source & Copyright: CITYWIRE. Portfolio managers are + rated by Citywire for 3 year riskadjusted performance for the period 31 May 2019 - 31 May 2022. Citywire's exclusive methodology ranks fund managers based on their individual track records across all funds they manage globally.
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Security selection within U.S. and Australian industrial contributed as we were overweight to stocks benefitting from strong earnings results. Overweight to U.S. single family rental contributed as the sector bounced back from first quarter underperformance. Underweights to U.S. malls was also additive as the sector continued to be pressured by fears of a consumer slowdown due to high inflation and gas prices. Positioning within U.S. data centers was a top detractor, as we were underweight to a REIT that benefitted from positive reports on data center leasing and pricing. Overweight to Canadian office detracted, with the sector lagging due to some risk-off investor rotation after outperformance earlier in the year.
From December 2018, the performance data shown is based upon the Fund's official Net Asset Value (NAV) prices. The performance data shown is net of fees and other charges but excludes any potential entry/exit charges- as such the return an investor receives may be lower. Prior to 31st December 2018, the data performance calculations reflect the month-end market close prices of the Fund's assets. After 1 January 2019, the performance data shown is based upon the Fund's Net Asset Value (NAV) prices of the last Irish business day of the month. For Funds not open for dealing on this day this will be an indicative NAV. As a result, it is possible that the stated performance and the actual investment returns available to investors will differ. The performance information reflects performance of the D2 Class income units. Periods over one year are annualised. Investors should obtain their own independent tax advice. **Outperforming the FTSE EPRA NAREIT Developed NTR Index is not specifically included in the objective for the Fund, and the figures shown in the table are provided as a comparison only. Past performance is no guarantee of future results.
All figures shown in this document are in U.S dollars unless otherwise noted.Source & Copyright: CITYWIRE. Portfolio managers are A rated by Citywire for 3 year riskadjusted performance for the period 31 March 2019 - 31 March 2022. Citywire's exclusive methodology ranks fund managers based on their individual track records across all funds they manage globally.
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Equity markets rallied following a widely anticipated 25 bps rate hike from the Fed and a more hawkish outlook statement. Hope of a thawing in the Russia-Ukraine conflict likely contributed to the positive sentiment in the second half of the month, which saw growth stocks and yield-sensitive plays outperforming. Global REITs (FTSE EPRA/NAREIT Developed NTR, +4.5%) outperformed equities (MSCI World, +2.8%) and global bonds (Barclays Global Aggregate, -3.0%). The 10-year U.S. bond yield soared 60 bps. The Americas was the best performing region. Europe was the main laggard. APAC property stocks had positive performance.
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Due to the global rotation away from defensive growth into value, overweight to underperforming defensive sectors like U.K. and Australian industrial, U.K. and U.S. self storage, and U.S towers and single family rental was a main detractor. Underweight to defensive U.S. data centers, which also underperformed due to the rotation, was a top contributor. Overweight to Japanese developers contributed, as higher beta players were out performers.
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Market Review
Despite a hawkish Fed pivot and concerns over COVID-19 omicron, equity markets continued to grind higher on the back of continued low real interest rates and evidence that omicron’s severity was milder than prior variants. Global REITs (FTSE EPRA/NAREIT Developed NTR, +6.3%) outperformed broader equities (MSCI World, +4.3%) and bonds (Bloomberg Global Aggregate, -0.1%). The Americas was the strongest region by a wide margin. Europe lagged as weakness in the Continent diminished strength in the United Kingdom. Asia trailed behind dragged by weakness in higher beta Japanese developers.
Fund Review
Emerging market exposure was a main detractor, due to growth concerns as a result of property cooling measures, and another China residential developer’s bonds were downgraded to junk status. Underweight to the U.S. self-storage sector detracted as the sector continues to benefit from better-than-expected operating updates across occupancy and rental rate growth. With a rotation back into structural growth, overweights to solid fundamentals in U.S. single family rental, industrial, and towers were main contributors. Within U.S. industrial, overweight to a stock that received several sell-side upgrades was beneficial.
November, 2021
Emerging market exposure was a main detractor, as there continued to be concerns over the China property slowdown. Though government policy has shifted from tightening to stabilization, these supply side measures have been inadequate to stabilize demand. Underweight to U.S. malls was a drag on relative performance with the sector being a strong performer as retailers’ earnings results have highlighted robust consumer spending amidst a strong October retail sales report. U.S. data centers and towers positioning detracted, driven by M&A activity. Overweights to strength in U.K. self-storage and U.K. and Australian industrial stocks were the main contributors.
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Risk assets sold off on rising stagflationary concerns caused by soaring energy prices, supply chain bottlenecks, and start-stop reopenings as governments struggled tocontain the COVID-19 delta variant. A hawkish Fed meeting during the month helped sparked a surge in U.S. 10-year bond yields. Rate sensitive property stocks (FTSEEPRA/NAREIT Developed NTR, -5.8%) underperformed global equities (MSCI World, -4.1%) and global bonds (Barclays Global Aggregate, -1.8%). Europe was the weakest performer as markets priced in slower growth driven by a combination of a surge in power prices and concerns that a China property-led slowdown would weigh on the export sensitive Euro area. After a relatively weaker first half, Asia was the outperformer, despite concerns over China dominating global headlines. The Americasalso had negative performance. Rising 10-year yields were in focus, coinciding with concerns of slowing growth.
Underperformance was mainly attributed to stock selection. Within Hong Kong, preference for developers over other sectors detracted amidst risk-off sentiment.Overweight to underperforming growth sectors such as U.K. student housing and self-storage, as well as high-quality office exposure in Spain, detracted. In the U.S.,overweights to single family rental and towers detracted. Underweight to malls was detractive. We missed on strength from Australian retail.Underweight to a U.S. data centers REIT contributed. Overweight to a U.S. health care REIT contributed due to positive updates on senior housing occupancy.
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The outperformance was mainly attributed to stock selection with no significant contributors or detractors. Underweight to Hong Kong modestly contributed, due to pressure from China concerns and the delayed border reopening. Overweight to a Canadian industrial REIT contributed. Underweight to traditional U.S. office REITs thatlagged as companies pushed back their return to office plans contributed. Overweight to Canadian office stocks detracted. Within U.S. malls, underweight to a company which benefitted from a good earnings report detracted. Stock selection within U.S. industrial names detracted due to underweight to stocks with strong second quarter operating results and increased interest from generalist investors.
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Global equities (MSCI World, +1.82%) ground higher during the month, led by global real estate investment trusts (REITs) (FTSE EPRA/NAREIT Developed NTR, +3.83%),which also outpaced global bond returns (Barclays Global Aggregate, +1.33%) U.S. 10-year bond yields fell almost 20 bps, boosting the relative performance of REITs.Defensive growth generally outperformed value/cyclicals. The relative pace of reopening drove relative returns by region. Europe was the best performing. The Americas performed well with the S&P and Dow Jones Index reaching record levels. Asia lagged.
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Fund Review
The main detractor was positioning within German residential. Overweight to a Chinese data center company detracted as it continued to sell off on market uncertainty surrounding growing calls for regulation of tech companies in China. Selection within Hong Kong developers detracted. The portfolio benefitted from exposure to the U.K. self-storage sector as stocks performed well. Overweight to higher beta Spain and France also contributed due to the regions’ exposure to reopening plays such as office and retail. Stock selection within U.S. data centers and hotel sectors contributed. Selection amongst U.S. net lease REITs was additive.
April, 2021
Global REITs picked up steam (FTSE EPRA/NAREIT Developed NTR index was up 6.4% vs the MSCI World index, which was up 4.7%). Concerns over renewed COVID-19outbreaks in developed markets at the beginning of the month gave rise to relief as vaccine rollouts accelerated (particularly in Europe) and case counts were brought undercontrol. Sidelining bond yields amidst continuing firm economic data and generally dovish central banks were also supportive factors. The Americas was the best performing region. Europe followed close behind. APAC was the laggard.
There are a number of risks that investors will have to grapple with. On balance, we are cautiously optimistic going forward but will continue to evaluate relative valuationsas we expect that uncertainty and policy-induced volatility is likely here to stay. Our investment decisions are guided by fundamental valuation levels and we will continueto search for opportunities using our bottom-up, stock selection focused approach. While we acknowledge it is possible value stocks could continue to rally and furthernarrow the value/growth valuation gap, we do not believe a further narrowing is warranted nor sustainable. We believe stocks with superior earnings prospects andfavorable structural demand drivers are best positioned, based on current valuation levels, to outperform in the intermediate to longer-term future. We have selectivelyadded to cyclical themes on weakness, particularly where we feel consensus has been too bearish and there is scope for earning upgrades.
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Fund Review
The risk-on rotation continued in anticipation of further fiscal stimulus and a vaccine-led recovery. Value and cyclical stocks were outperformers, while higher growth and defensive stocks lagged, which hurt excess returns. Underweight to U.S. retail, hotels, and traditional office was the most significant detractor. These risk-on REITs were leaders, boosted further by improved outlook commentary (hotels) and leasing activity (shopping centers). Exposure to global industrial and U.S. towers and lab office also detracted, as these defensive/structurally driven sectors lagged.
Stock selection in Hong Kong also modestly detracted, as we missed on a bounce in performance on lessened travel restrictions and spending vouchers for residents. Stock selection in U.S. apartments contributed, as we are overweight to coastal gateway stocks, which benefited from the green shoots reflected in the earnings releases for the coastal portfolios. Stock selection in Australian diversified contributed. Avoiding Netherlands and Switzerland stocks also contributed. The retail heavy Netherlands was one of the weakest regions. Defensive Switzerland lagged due to the risk-on sentiment
File: https://commentary.quantreports.net/wp-content/uploads/2021/04/Fund_Fact_Sheet_PGIF_GPSF_D2_Inc_USD_E.pdfasset_class:
asset_category:
peer_benchmark:
broad_market_index:
manager_contact_details: Array
ticker: PGI0002AU
release_schedule: Monthly
structure: Managed Fund
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factsheet_url:
Fact Sheet
in the PDF file, grab the “Market Review”
fund_features:
Principal Global Property Securities aims to provide a total return primarily through investment in a portfolio of global property securities. The Fund seeks to achieve the investment objective by investing primarily (i.e. at least 80% of its net asset value (“NAV”)) in a global portfolio of publicly traded securities of companies engaged in the property industry or whose value is largely derived from property assets.
- The Fund shall invest no less than 80% of the assets of the Fund in real estate investment trusts (“REITs”) and common equity securities issued by non-REIT real estate companies in the United States and REITs, common equity securities issued by non-REIT real estate companies and similar structures in other areas of the world.
- Both REITs and common equity securities issued by non-REIT real estate companies shall be tradable on major markets and exchanges as securities.
- Non-REIT real estate companies invested by the Fund are companies which at the time of investment have at least 50% of their assets, income or profits derived from products or services related to the global property industry. For details please refer to KFS & Summary Prospectus.
- The fund is. exposed to property types not prominently available in the private commercial market, such as healthcare, data centers, and self-storage.