Multi-Manager Global Real Estate
as of June 30, 2014
Fund Commentary
In the second quarter, global real estate securities continued their upward trend, with the FTSE® EPRA®/NAREIT® Global Index returning 6.90%. Performance continued to be led by developed markets, particularly Continental Europe and Japan. Emerging market real estate investment trusts (REITs) lagged, posting more than a 5% decline as a group. From a sector perspective, lodging was the top-performing area globally, closely followed by the retail segment. Self-storage was a meaningful underperformer as was industrial. Year-to-date, the FTSE® EPRA®/NAREIT® Global Index has gained 10.98%.

The Multi-Manager Global Real Estate Fund finished slightly behind the benchmark during the quarter, returning 6.71%, compared with the benchmark return of 6.90%. The Fund benefited from underweight exposure to emerging markets, although stock selection within emerging markets detracted. Stock selection within the Pacific ex-Japan region also subtracted from results.

Among sub-advisers, CBRE added value due to their lack of emerging markets exposure and strong results in the European market. The EII portfolio struggled within the Asian market during the quarter.
Investor Profile

If you're a long-term investor looking to diversify your investments by pursuing the growth potential of global real estate, then this Fund may be right for you. It is intended for investors who are aware that foreign markets may involve additional risks, such as social and political instability, reduced market liquidity and currency volatility.

Investing in real estate equities involves special risks linked to the real estate market, including declines in the value of real estate, changes in the value of the underlying property, and defaults by borrowers. Foreign investing entails the risk that returns may be reduced by currency fluctuations.

  • Invest at least 80% of net assets in global real estate equities, primarily in real estate investment trusts (REITs).
  • Select complementary managers from a broad universe of investment managers.
  • Blend managers into a single fund in an effort to provide an attractive combination of risk and return.
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