Multi-Manager Global Real Estate
as of March 31, 2014
Fund Commentary
Global real estate securities enjoyed a strong start to the year, with the FTSE® EPRA® /NAREIT® Global Index returning 3.82%. Positive performance was led by the strong recovery of U.S. REITs following last year’s relatively weak returns. Strength within the U.S. market was largely the result of a surging apartment sector that had suffered during 2013. In addition, the U.K. market benefited from significant property demand from both occupiers and investors. Within Asia, real estate securities in Japan sold off meaningfully, posting a double-digit decline during the quarter.

The Multi-Manager Global Real Estate Fund lagged the benchmark during the quarter, returning 3.00% compared with the FTSE® EPRA®/NAREIT® Global Index return of 3.82%. The Fund’s overweight allocation to Japan hindered returns during the quarter. The Fund performed well within North America. From a sector perspective, the Fund benefited from strong results within the office segment.

The Fund’s sub-advisers performed similarly during the quarter, each underperforming the benchmark. In the case of CBRE, their overweight allocation to Japan represented a drag on results. EII’s stock selection among diversified REITs also was subtractive.
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.

Philosophy
  • 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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