The UBS Clarion Global Property Securities Fund aims to outperform (after management costs) the FTSE EPRA/NAREIT Developed Rental Net Return Index (AUD Hedged) over rolling three year periods and invests in a diversified portfolio of listed global real estate companies.
The portfolio outperformed for the month driven by
strong stock selection which more than offset negative
sector allocation.
What is UBS Clarion Global Property SecuritiesFd UBS Clarion Global Property SecuritiesFd is an Managed Funds investment product that is benchmarked against Dvlp Global Real Estate and sits inside the Property - Global Listed Property Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The UBS Clarion Global Property SecuritiesFd has Assets Under Management of 349.90 M with a management fee of 0.9%, a performance fee of 0.00% and a buy/sell spread fee of 0.5%.
How has the investment product performed recently? The recent investment performance of the investment product shows that the UBS Clarion Global Property SecuritiesFd has returned 9.87% in the last month. The previous three years have returned 3.96% annualised and 19.18% each year since inception, which is when the UBS Clarion Global Property SecuritiesFd first started.
How is risk measured in this investment product? There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since UBS Clarion Global Property SecuritiesFd first started, the Sharpe ratio is 0.2 with an annualised volatility of 19.18%. The maximum drawdown of the investment product in the last 12 months is -16.97% and -65.09% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product? Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The UBS Clarion Global Property SecuritiesFd has a 12-month excess return when compared to the Property - Global Listed Property Index of 2.02% and 0.77% since inception.
Does the investment product produce Alpha over its Peers? Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. UBS Clarion Global Property SecuritiesFd has produced Alpha over the Property - Global Listed Property Index of 0.06% in the last 12 months and 0.04% since inception.
What are similar investment products? For a full list of investment products in the Property - Global Listed Property Index category, you can click here for the Peer Investment Report.
What level of diversification will UBS Clarion Global Property SecuritiesFd provide? UBS Clarion Global Property SecuritiesFd has a correlation coefficient of 0.99 and a beta of 1.22 when compared to the Property - Global Listed Property Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers? For a full quantitative report on UBS Clarion Global Property SecuritiesFd and its peer investments, you can click here for the Peer Investment Report.
How do I compare the UBS Clarion Global Property SecuritiesFd with the Dvlp Global Real Estate? For a full quantitative report on UBS Clarion Global Property SecuritiesFd compared to the Dvlp Global Real Estate, you can click here.
Can I sort and compare the UBS Clarion Global Property SecuritiesFd to do my own analysis? To sort and compare the UBS Clarion Global Property SecuritiesFd financial metrics, please refer to the table above.
Has the UBS Clarion Global Property SecuritiesFd been independently verified by SMSF Mate? This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Comments from SMSF Mates SMSF Mate does not receive commissions or kickbacks from the UBS Clarion Global Property SecuritiesFd. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - July 31, 2023 In July, the portfolio modestly underperformed the benchmark.
In the Americas region, positive stock selection was offset by negative sector allocation, generating negative relative performance for the month. From a sector allocation perspective, our overweight to the underperforming storage sector combined with an underweight to the outperforming office sector were the two key contributors to negative sector allocation. There was certainly a material reversal in July, as office was up +15.2% and storage was down -4.2%. While we acknowledge the office sector’s fundamental weakness is an extremely wellunderstood narrative, and it is likely that the office sector was oversold and became “too cheap” relative to the benchmark into mid-year, our fundamental work suggests there will be no improvement in occupancy or market rental rates into 2024.
In the Asia-Pacific region, relative performance was modestly positive versus the benchmark for the month. Positive relative contribution from Australia was driven by an overweight position in Rural Funds Group and Lifestyle Communities (LIC AU). LIC is significantly scaling its production rate with the launch of seven new projects, underpinned by strong demographic tailwinds. The manufactured housing estate developer outperformed following the RBA’s decision to pause its rate hiking cycle.
In the European region, relative underperformance was driven by stock selection in Continental Europe. Our European stock selection has delivered solid relative outperformance year-to-date but underperformed in July.
We have been materially underweight German residential stocks due to over-levered balance sheets combined with moderating fundamentals. In July, the +8.4% rally in European real estate stocks caused a short-covering rally in the highest levered names, such as German residential companies Vonovia (+18.7%) and LEG (+22.3%). Over any reasonable period, high quality balance sheet companies outperform low quality balance sheet companies.
Performance Commentary - June 30, 2023 The portfolio modestly trailed the benchmark for the month as positive stock selection offset by allocation decisions. Positioning in Europe and the Asia-Pacific region added value, while positioning in the Americas detracted from returns.
Relative performance in the Americas region was a drag for the month as positioning in the office sector hurt performance, we do not have any exposure to the office sector given ongoing challenges with excess supply and low demand. The sector outperformed for the month but has underperformed year-to-date. In the Asia-Pacific region, relative outperformance was driven by positioning in Australia, where stock selection and sector allocation contributed to performance. Meanwhile, relative performance in Hong Kong, Japan and Singapore was essentially flat. In the European region, relative outperformance was driven by positive stock selection on the Continent and the U.K, while sector allocation decisions were flat. The portfolio is materially underweight the Nordic region, which was a significant underperformer for the month.
Performance Commentary - March 31, 2023 The portfolio posted positive relative performance in a down month, led by sector allocation decisions. Relative performance in the Americas region was a drag for the month as positioning in the healthcare and net lease sectors hurt performance, overshadowing strong performance in the storage sector. An underweight to the office sector continues to add value. In the Asia-Pacific region, sector allocation and stock selection decisions benefited performance. Sector allocation was positive in each market within region and stock selection was mixed as Australia and Singapore contributed to performance while Japan and Hong Kong modestly detracted for the month. In the European region, relative outperformance was driven by positive stock selection on the Continent and the U.K, while sector allocation decisions were flat. The portfolio is materially underweight German residential, which was a significant underperformer for the month. Meanwhile, overweight positions in NSI and PSP Swiss Property added value.
Global real estate stocks were down -4.0% in March.
In March, the sudden failures of Silicon Valley Bank and Signature Bank of New York ignited concerns of a regional banking crisis in the U.S. These concerns subsequently shifted to Europe, where the financial health of Credit Suisse was in the crosshairs prior to an engineered merger with UBS. The swift action of the Federal Reserve, the U.S. Treasury Department and other central banks helped to restore confidence in the financial system.
Performance Commentary - February 28, 2023 The portfolio outperformed the benchmark for the month.
Positive relative performance within the Americas region was led by the U.S, with two significant drivers of relative outperformance for the month; an overweight to the outperforming storage sector (+1.7%) and an underweight to the underperforming office sector (-12.6%). Our overweight to the storage sector continues to generate outperformance for the portfolio, as 2023 guidance came in at the high end of the range. In addition, in early February, Public Storage (PSA) made public an unsolicited offer to acquire Life Storage (LSI) in an all-stock deal that represented a +17% premium to LSI’s unaffected share price (LSI is a material overweight in the portfolio). As of this writing, based on our discussions with the LSI Management Team, they will sell the company at the “right price,” but PSA has yet to offer the “right price.” Stay tuned!
In the Asia-Pacific region, underperformance was driven by the overweight of one underperforming stock – LINK REIT (823.HK). LINK REIT was down -15.3% for the month, driven by the extremely surprising news that the company is going to execute an HK$18.8 billion Rights Offering (1 for 5 rights offering at HK$44.20/share; -29.6% discount to the last price). Management believes there will be significant acquisition opportunities as the year progresses, so they want to prepare their “war-chest” now in order to move quickly when the acquisition opportunities arise.
In the European region, relative outperformance was driven by positive stock selection on the Continent. Interestingly, there was no one stock that drove relative outperformance from stock selection for the month, but rather a basket of overweight stocks that outperformed for the month plus not owning underperforming Vonovia (-7.8%; German residential).
Performance Commentary - January 31, 2023 The portfolio outperformed the benchmark for the month as stock selection and sector allocation decisions added value.
Relative performance within the Americas region was led by the U.S., where all property sectors posted solid performance for the month. Notable contributors included overweights to the outperforming hotel, industrial and data center sectors, while an underweight to the underperforming net lease sector also added relative value. Stock selection added value in the storage sector, via an overweight to outperforming CubeSmart.
In the Asia-Pacific region, relative performance in Japan was helped by an overweight to Japan Hotel REIT, which drove positive stock selection as hotel stocks were the top performing stocks in Japan. In Australia, stock selection was driven by the outperformance of Goodman Group (industrial), which benefited from continued strong rental growth.
In the European region, relative performance was a drag for the month as positive sector allocation on the Continent was more than offset by sub-par stock selection, which was primarily due to having below-benchmark exposure to a few German residential stocks that outperformed for the month.
In the U.K. relative performance was a modest drag for the month.
Performance Commentary - December 31, 2022 The portfolio modestly underperformed for the month.
Stock selection was flat while sector allocation decisions were modestly negative for the month. The European region was the bright spot for the month as stock selection added value on the Continent and the U.K. In the Americas, an overweight to the underperforming U.S. market was a drag on performance for the month. Meanwhile, performance in the Asia-Pacific region was mixed as positioning in Japan added value but was offset by other markets within the region.
Global real estate stocks were down -3.8% in December. Towerds the end of December, stock market sentiment turned more constructive as economic reports suggest inflation is moderating and medium-term interest rates, using the 10-year U.S. Treasury yield as a proxy, retreated materially from their high reached in early October. There is an increasing probability that the U.S. Federal Reserve and central banks around the world will begin moderating the pace of future rate hikes as the probability of a recession in 2023 has increased substantially.
With 2022 in the rear view, listed real estate presents a unique opportunity for investors having materially underperformed broad equities, fixed income, and private real estate. Real estate stock absolute and relative underperformance is striking considering their resilient earnings growth versus broad equities, growing dividends versus bonds, and comparable assets to the private real estate market. We believe real estate stocks are oversold and are very attractively valued relative to private market real estate.
Performance Commentary - November 30, 2022 The portfolio underperformed the benchmark for the month.
Relative underperformance within the Americas region was driven by overweights to the U.S storage and hotel sectors, which underperformed on the month despite limited new fundamental news. This was partially offset by an overweight to the top-performing U.S. data center sector, which was up +19% for the month. We have been adding to data centers over the last several months as the sector had underperformed earlier in the year and is now attractive based on solid pricing power and valuations that screen attractive relative to other property sectors.
In the Asia-Pacific region, relative outperformance was driven by strong stock selection within Australia and Hong Kong. Within Australia, overweight positions in outperforming industrial owner Goodman Group, led to outperformance for the month. In Hong Kong, last month’s underperformers became this month’s outperformers as concerns about China’s zero-COVID policies begin to moderate and an expected reopening of the Chinese economy began to take shape. As a result, two of our larger positions, Link REIT (+16%) and Hang Lung Properties (+45%) outperformed for the month.
The European region was a relative detractor for the month with positive stock selection in the U.K. more than offset by negative stock selection in Continental Europe. In the U.K., positive stock selection was driven by an overweight to residential landlord Grainger while overweights to underperforming German residential REIT LEG Immobilien (- 8%) and Shurgard Self Storage (-5%) were a drag on relative performance.
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