DEVELOPING
THEMES FOR
INVESTORS TO
WATCH.
Top performing real estate funds to 31 May 2015
Fund
5 Year annualised
total return
Absa Property Equity Fund A
24.50%
Plexus Wealth BCI Property Fund
22.29%
Coronation Property Equity Fund
21.06%
Ashburton Multi-Manager Property
Fund B1
20.70%
Prudential Enhanced SA Property
Tracker Fund
20.59%
Investec Property Equity Fund A
20.47%
Catalyst SA Property Equity PSG
Fund A
20.44%
Stanlib Property Income Fund A
20.31%
Old Mutual SA Quoted Property Fund
20.04%
As the sector has developed,
however, some fund managers
have also started to be more
benchmark agnostic. Different
portfolios have started to take on
individual characteristics.
Stanlib Multi-Manager Property
Fund A
19.91%
FTSE/JSE SA Listed Property Index
20.83%
If one looks at the four topperforming funds for the year-todate, as an example, not one of
them includes Growthpoint in their
top five holdings. Only one has
Redefine among its top five.
South Africa real estate fund
category average
19.22%
Returns from listed property in
South Africa have been outstanding
over the last ten years. The
sector has delivered compound
annual growth of just under 21%
since 2005.
Most analysts are warning that
investors should get used to the
idea of more muted growth from
here, but the diversification benefits
of the asset class nevertheless
make it an important consideration
when building a balanced portfolio.
Traditionally it has been quite hard
for fund managers to generate high
levels of out-performance in this
sector, as it is narrow and highly
concentrated. The two biggest real
estate investment trusts (REITs),
Growthpoint and Redefine, have
tended to dominate both the
index and portfolios, and there
has been little room for managers
to differentiate themselves as the
smaller counters have been too
illiquid to use extensively.
These strategies have been able to
generate significantly better returns
for investors, although some
question whether these managers
are not taking on excessive
levels of risk to achieve this. The
proof will be in whether their
performance is sustainable over the
long term, particularly periods of
market weakness.
Taking a more extended view of the
category, then, the adjacent table
lists the best listed property funds
over the last five years:
The Absa and Plexus funds that top
this list are two of those that have
Source: Morningstar
begun to build portfolios that look
very different to the index. %