Global real estate securities delivered a positive return for the quarter, with the FTSE® EPRA®/NAREIT® Global Index returning 1.92%. Japan stood out as one of the best-performing markets during the period, with a boost from Tokyos selection as host for the 2020 Olympics. Cyclical data there was mixed, however, as condominium sales exceeded expectations, while retail sales and consumer sentiment disappointed. Within Europe, properties in major cities continue to attract global investors seeking stable yield.
The Multi-Manager Global Real Estate Fund underperformed during the quarter, with a return of 1.80% compared with the FTSE® EPRA®/NAREIT® Global Index return of 1.92%. Regional allocation was relatively neutral during the quarter, while stock selection was strong. Securities in Asia outperformed, while returns within North America lagged.
From a sub-adviser perspective, both CBRE and European Investors underperformed within the office sector. European Investors added value in shopping malls, while CBRE performed well among diversified companies.
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.