This year, listed real estate abroad has known few boundaries. Not only did it kick dust in the eyes of SA property players, but its returns were also in excess of all international equity sectors and the bond markets. Indeed, a top portfolio performer. But not all shares are as safe as houses and the picking process runs deep. However, it hits the spot when you get it right, and if the rand is weak, the deal gets even sweeter.
Global real estate was up around 15% year-to-date, in terms of the FTSE EPRA/NAREIT developed market Index, measured in US dollars, and it has done relatively well, compared to other asset classes in South Africa and overseas. By comparison, the JSE Listed Property Index (SAPY) returned only 3.4%, while the MSCI World Index advanced 12.8% and the JP Morgan Global Bond Index posted a 2.3% return over the same period.
Peter Clark, portfolio manager at Investec Asset Management, believes this offshore asset class is a solid foundation on which to build a diversified portfolio.
"Its defensive characteristic holds great appeal in a low-interest rate environment. Bond yields are down, so property stock is supported as a yield asset class, and...