Invest
Market fears see investors miss performing funds
Despite outperforming other asset classes, the post-GFC hangover has meant investors are reluctant to return to A-REITs.
Market fears see investors miss performing funds
Despite outperforming other asset classes, the post-GFC hangover has meant investors are reluctant to return to A-REITs.
According to the latest Australian Listed Property Securities Sector Review, published by Lonsec Research, while the asset class has returned an average return of 11.4 per cent, it has been largely ignored by investors.
“You might normally expect that when an asset class performs as strongly as the A-REIT sector has done over the past few years, retail investors would sit up and take notice,” Lonsec Research senior analyst Nick Thomas said.
“Looking at A-REITs within our active peer group, half of them experienced negative net fund flows in the year to December 2015.”
A-REITs clearly outperformed other assets over the same period when compared to the 4.5 per cent returned from global bonds and the 3.8 per cent from global listed infrastructure, the report said.
Meanwhile, equities posted negative returns over the same period, -3.3 per cent globally and -9.3 per cent domestically.
Post-GFC fear may be the reason why A-REITs have been forgotten, Mr Thomas said.
“The GFC may be in the past, but a lot of investors haven’t forgotten the pain of capital losses from a sector they expected to be more defensive,” he said.
“On one level, you can understand why investors may still be cautious, but on the other hand they may have missed structural improvements within the sector since this time. In the past few years, A-REITs have proved to be a solid asset class that has been a beneficiary of the low interest rate environment, even through the general market volatility of 2015-16.”
However, according to Lonsec Research’s analysis, with the sector accumulating strongly since 2014, these excess returns have become more difficult to find.
“With the bull market continuing into 2016, valuations in the sector have started to look stretched and it has become more difficult for active managers to find value. But when market conditions change, that’s when an active strategy should begin adding value once again,” Mr Thomas said.
RELATED ARTICLES
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
