Reitway Global | Fund Commentary | July 2022

                                                                  Reitway Transparent

  • Global Real Estate outperformed the broader stock market in July
  • There are 28 sectors and subsectors available in the asset class
  • Viewing Global and Local Listed Property as the same asset class could be a risk

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Market Commentary

In July, Real Estate posted their strongest monthly performance since December 2021. Our benchmark, the GPR 250 REIT World Index gained 8.45% (USD) in the month and -6.16% over 1-year. The strong rebound negated nearly half of the losses over the shorter term, clawing back from -13.52% over 1-year in June.

REITs have continued to show their resilience, with 84% of companies reporting increased FFO from a year ago and 92% reporting an increase in their NOI.

FFO Reits

Source: Nareit

Fund Performance

The Fund returned 7.57% in July, underperforming the benchmark. Our overweight exposure to the Manufactured Housing and underweight allocation to the Free-Standing Retail sector detracted from our relative returns during the month. We are encouraged by the improved short-term returns and remain pleased with the excess returns we have delivered over the longer time-periods.

2022 Slide updates July

Actual annual figures are available to the investor on request

REIT Performance versus the broader Stock Market

All REIT sectors posted positive returns for the month, and while the broader markets performed strongly as well, they have underperformed real estate YTD.

June Pic 1 2022

Sector Overview 

The best performing sectors were Specialty and Resorts, returning 14.5% and 13% respectively. This puts Specialty at 10.9% for year. The Resort sector is down 3.6% for the year. Industrial returned 10.4%, Data centres, 5.2% and Self-storage 9.8% These sectors are down > 10% YTD.

Outlook

There is still a disconnect between stock market returns and operating performance. As we saw in the first quarter companies are reporting on continued strong operating performance this earnings season.

Despite the impact of slower growth and higher inflation on listed real estate securities, we believe real estate fundamentals remain sound. REITs have the potential to show meaningful cash flow growth and solid income. We remain steadfast in our belief that the asset class can post meaningful returns relative to stocks and bonds, even against a slower-growth, higher-inflation backdrop, particularly as valuations remain attractive.

As of July 2022, our portfolio forward yield is over 3% and our constituents are expected to deliver high single digit dividend growth per year for the next three years. Additionally, the discounts to NAV are currently at very appealing levels.

Through our active portfolio management, our focus remains on constructing a diversified portfolio that outperforms not only in rising markets, but also during periods of market stress.

 
For more information on any of our funds please contact oliviat@reitwayglobal.com or on 082 676 6115 

 

Disclaimer

Although all precautions have been made to ensure the reliability of data and information contained in this presentation, Reitway cannot guarantee the reliability thereof. Past performance referred to in this presentation is not necessarily indicative of future performance. Similarly, forecasts contained in this presentation involve risks and uncertainties which may result in future performance, outcomes and results which differ materially from such forecasts. You are accordingly cautioned not to place undue reliance on any historical data, general information or forecasts used in this presentation.

Reitway accepts no liability whatsoever for any loss, damage (direct or consequential) or expense suffered by a recipient as a result of any reliance placed on any information contained in this presentation or any opinions expressed during this presentation. The views, opinions and comments reflected in the presentation represent those of Reitway, associated companies and employees.

Reitway Global (Pty) Ltd

Registration No: 2011/125542/07. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services Act, 37 of 2002. FSP license No: 43747

 

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments Schemes Control Act, No 45 of 2002 and is a full member of the Association for Savings and Investment SA. 

Collective Investment Schemes in securities are generally medium to long term investments. The value of participatory interests may go up or down and past performance is not necessarily an indication of future performance.  The Manager does not guarantee the capital or the return of a portfolio. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending.  A schedule of fees, charges and maximum commissions is available on request.  BCI reserves the right to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently.  Additional information, including application forms, annual or quarterly reports can be obtained from BCI, free of charge.

Performance figures quoted for the portfolio is from MoneyMate, as at the date of this document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s  charge into account.  Income distributions are declared on the ex-dividend date.  Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividend withholding tax.

Investments in foreign securities may include additional risks such as potential constraints on liquidity and  repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information.

Boutique Collective Investments (RF) Pty Ltd retains full legal responsibility for the third party named portfolio.

Although reasonable steps have been taken to ensure the validity and accuracy of the information in this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document, whether by a client, investor or intermediary.  This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in any form whatsoever.  Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI/the Manager’s products.

Access the BCI Privacy Policy and the BCI Terms and Conditions on the BCI website (www.bcis.co.za).

A feeder fund, that a feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges and which could result in a higher fee structure for the feeder fund.