BT shines in tough times for property

The names appearing in the Property Securities (Australia) category differ strongly in their fund management style, but all place value on a strong team.

BT Investment Management, and in particular, its Wholesale Property Securities Fund, is the overall winner of the category.

Lonsec highlighted BT’s strong collegiate culture, flexibility and minimal exposure to the Centro refinancing issues as the reason for its decision.

BT head of property securities Peter Davidson believes the collegiate culture of the Wholesale Property Securities Fund enables BT to steer away from a ‘one-man-band’ concept of fund management, which can lead to falls in performance “when people fall in love with stocks or get enamoured with them”.

He identified three core reasons behind BT’s success.

“Firstly, we use a variety of valuation techniques when we’re looking at stocks,” he said.

“Secondly, we look at absolute value for stocks, so on any given day we know whether we should be buying or selling those stocks.

“Thirdly, we put a lot of analytical effort into the fund, and where we see ourselves differentiated is we do a lot of cross-checking and validation of what we have been told by management.”

Vanguard Investments, and in particular its Wholesale Property Securities Index Fund, was one of two finalists in the Australian Property Securities category.

Vanguard chief investment officer Eric Smith believes Vanguard’s Wholesale Property Securities Index Fund was a finalist in the category because of its consistent long-term performance.

“Our coverage is of the property component of the ASX 300, so it means we pick up some of the smaller trusts, which we think in the long run gives investors valuable diversification,” he said.

“One of the key assets of our investment team is that we’ve only lost two senior investment professionals in the 12 years I’ve been building the team,” he added.

APN Funds Management head of investments Michael Doble nominated the long-term performance of APN’s Property for Income Fund No. 1 as a reason APN was selected as the other finalist in the awards.

“The fund outperforms in total returns as well as on risk adjusted terms ... [and] has an almost 10-year track record on outperformance to the index,” he said.

All three fund managers reported some pessimism about the short-term future of the property securities market but optimism for the long-term.

“I think you would be an ostrich if you thought things were going to be simple for the sector. We certainly haven’t got our head in the sand in that regard,” Doble said.

“But that’s the short-term and I think the long-term outlook for the sector remains as strong as it’s ever been.”

— Amy Corderoy