Multi-Manager Global Real Estate
as of December 31, 2013
Fund Commentary
During the fourth quarter, property news was characterized by stable to positive earnings releases from listed property companies, improving property fundamentals, capital raising and an active transactions market. However, news of the Federal Reserve's tapering drove up interest rates during the quarter and put pressure on global real estate security prices. Global real estate security prices suffered during the quarter, with the FTSE® EPRA®/NAREIT® Global Index returning -1.25%. The European regions delivered positive performance, gaining 6%, while the Pacific ex Japan and emerging market regions lagged, down -5.38% and -8.08%, respectively.

The Multi-Manager Global Real Estate Fund outperformed during the quarter, with a return of 0.21% compared with the benchmark return of -1.25%. Stock selection was strong across the Fund, with particular strength in the Americas. The Fund also benefited from its underweight allocation to emerging markets.

For the full year, the Fund finished ahead of the benchmark, returning 1.87% compared with the FTSE® EPRA®/NAREIT® Global Index return of 1.57%. Both of the Fund's sub-advisers outperformed for the quarter and the year.
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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