NAV on 2019/01/15
|NAV on 2019/01/14
|52 week high on 2018/09/05
|52 week low on 2018/02/23
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
STANLIB Collective Investments (RF) Limited
FTSE EPRA/NAREIT Developed Rental Index Net Total Return
Keillen began his property fund management career at Standard Bank Properties in 2004 managing its leveraged listed property product. He became a listed property analyst at Stanlib in 2005 and now also co-manages the Stanlib Aggressive Income Fund.
STANLIB Global Property Feeder Fund - Sep 18
The fund delivered about 2% returns in ZAR for the third quarter versus a benchmark return of 3%. Year-to-date the fund has returned about 14% returns in ZAR. This is marginally behind the benchmark, which has delivered 15% year-to-date. The bulk of the fund year-to-date returns in ZAR were driven by the near 14% rand weakness against the dollar. The third quarter performance of the benchmark was relatively weak albeit positive, after the market recovered from a strong second quarter in which the fund delivered 21% in ZAR. Despite a relatively weaker third quarter where the benchmark returned 0.3% in US$, the global property index has been basically flat year-to-date in USD, delivering a total return of 1.3%. Our underweight position to the US detracted from performance in 3Q18 whereas our overweight position in Germany helped the fund’s performance. From a stock selection perspective, we benefitted from our overweight positions in Leg Immobilien (German residential), Simon Property Group (Retail) and Prologis (Logistics), which did well for the quarter. While helping performance in 2Q18, overweight positions in self-storage stocks such as Public Storage, Cubesmart and Extra Space Storage detracted from our performance in 3Q18.
The US raised interest rates by another 25bps late in 3Q18 on the back on continued strong economic data. US 10-year bond yields rose from 2.86% to 3.06% during the quarter, with global property performing relatively well as rates continued to rise. In USD, the US (+0.8%), Hong Kong (+6.8%) and Canada (+4.8%) were amongst the best performing countries, while Europe (-9%) and the Netherlands (-11%) were amongst the worst performing markets. US retail property focused stocks such as Simon Property Group have continued to recover after falling out of favour due to industry store closures and concerns around the growth of e-commerce. UnibailRodamco-Westfield, a global retail stock of significant size in which we have a marginal overweight position, has not yet seen the positive performance evidenced in Simon Property Group. There has been no major changes to property fundamentals across the various markets and sectors, with perhaps the expectation that the US will potentially raise interest rates faster than initially believed at 2Q18. The fund continues to remain overweight Europe with a specific focus on Germany and has a selective underweight position in the US. It is largely neutral on the UK, Australia, Japan, Singapore and Hong Kong.
Global listed property is trading at a discount of about 8% to net asset value and is offering a one-year forward yield of just over 4%, assuming 5-6% earnings growth. Markets are forecasting one more Fed interest rate hike in 2018, with a continuation of the hiking cycle in 2019. This, together with global trade wars and geopolitical tensions could continue to cause some volatility in the short term. The rand volatility against the USD also poses a risk to returns. However, property fundamentals remain good in general and are backed by positive economic growth prospects. We encourage investors to take a 3 to 5 year view. The commentary gives the views of the portfolio manager at the time of writing. Any forecasts or commentary included in this document are not guaranteed to occur
The investment objective of the STANLIB Global Property Feeder Fund is to maximise long term
total return, both capital and income growth. Apart from assets in liquid form, it will consist solely of
participatory interests in a single portfolio of a collective investment scheme operated in territories
with a regulatory environment which is to the satisfaction of the manager and trustee of a sufficient
standard to provide investor protection at least equivalent to that in South Africa, namely the
STANLIB Global Property Fund.