SPECIALISTS IN MANAGING
GLOBAL PERFORMANCE SINCE INCEPTION – USD – GROSS OF FEES AS AT 31 MARCH 2023
| wdt_ID | Fund | Annualised Return Since Inception (30 Nov 2007) | 10 Year Return Annualised | 5 Year Return Annualised | 3 Year Return Annualised | 12 Months Ended 31 March 2023 |
|---|---|---|---|---|---|---|
| 1 | Fund Performance | 5.57% | 4.81% | 3.79% | 7.70% | -19.88% |
| 2 | Benchmark | 2.43% | 2.88% | 1.24% | 6.81% | -22.50% |
| 3 | Alpha | 3.14% | 1.93% | 2.55% | 0.89% | 2.62% |
GLOBAL PERFORMANCE SINCE INCEPTION – ZAR – GROSS OF FEES AS AT 31 MARCH 2023
| wdt_ID | Fund | Annualised Return Since Inception (30 Nov 2007) | 10 Year Return Annualised | 5 Year Return Annualised | 3 Year Return Annualised | 12 Months Ended 31 March 2023 |
|---|---|---|---|---|---|---|
| 1 | Fund Performance | 12.36% | 11.89% | 12.51% | 7.56% | -2.93% |
| 2 | Benchmark | 9.03% | 9.83% | 9.75% | 6.68% | -6.08% |
| 3 | Alpha | 3.33% | 2.06% | 2.76% | 0.88% | 3.15% |
Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2023
Benchmark: UBS Global Real Estate Investors Index USD to 31 March 2015; thereafter FTSE EPRA/NAREIT Developed Rental Index Total Return
Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2023
“Global Listed Property” – Combined: UBS then FTSE EPRA/NAREIT Developed Rental Index Total Return
“Global Bonds” – Citi World Global Bond Index (WGBI) All Maturities
“Global Equities” – MSCI Daily TR Gross World USD (TR)
“Global Cash” – Deutsche Bank 3M T-Bill Index
Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2023
Global Listed Property – Combined: UBS then FTSE EPRA NAREIT Developed Rental Index Total Return
Global Property Developers – Combined Developers Index: Global Developers Index TR USD (UREIUDDE) then FTSE EPRA NAREIT Developed non-rental Total Return Index (TENGNU)
The above graph illustrates the long-term performance of real estate companies focused on owning assets for their rental income streams, compared to real estate companies focused on generating earnings through developing and selling properties. Development permissions are often sought, and approvals granted, in prosperous periods where economic conditions and earnings growth are supportive of demand and therefore, development profits. However, in the time from conception to completion of a development, economic conditions may change such that properties are delivered at less favourable times in the cycle. Dedicated developers who develop through full-cycles will at times not achieve their targeted profit margins and may underestimate the appropriate risk premium needed to compensate for development risk.
Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2023
“Global Listed Property” – Combined: UBS then FTSE EPRA/NAREIT Developed Rental Index Total Return
“Global Bonds” – Citi World Global Bond Index (WGBI) All Maturities
“Global Equities” – MSCI Daily TR Gross World USD (TR)
Over the long-term, global listed real estate has been lowly correlated with global bonds and moderately correlated with global equities. Looking at correlations over the past 25 years, listed real estate correlation has been approximately 0.74 with equities, and approximately 0.36 with bonds. This evidences diversification benefits, which enable better risk-adjusted returns over long-term periods when included in a diversified portfolio.
Days to liquidate Fund
Max 20% of daily trade
Source: Catalyst Fund Managers & Bloomberg
Data is as at 31 March 2023
Based on average daily trade and not being more than 20% of the daily trade,
we should be able to liquidate
– 93.85% of the fund in two days, and
– the whole fund within 5 days
The banking turmoil seen in the first quarter of 2023 may be interpreted by some as an unassailable harbinger of what we noted as the “most anticipated recession in history” in our Q4 2022 report, and the “million-dollar question” of whether it will be “hard, soft, or no” landing remains. The truth is that no one really knows, which is why we at Catalyst believe that it is ever more important to have a robust and multi cycle-tested investment process to help investors navigate through this period of markedly heightened uncertainty.
As such, we will continue to be judicious and disciplined in following our long-standing and robust investment process that has been tested over numerous market cycles and periods of dislocation. As active, specialist listed real estate investors we are likewise fortunate to have an extensive opportunity set spanning a variety of sub-sectors and companies with unique underlying economic drivers. While these will not be entirely immune to the ebbs and flows of the broader economy and stock markets, it does provide us with the tools to construct portfolios for varying economic conditions to better enable the management of risk and return over the long-term.
The estimated forward funds available for distribution (FAD) yield for the sector is 5.38%. For investors with a similar long-term time horizon, the sector appears fairly valued with more attractively priced opportunities for astute active managers to generate superior risk-adjusted returns.
