Focus on the fundamentals at RREEF

The finalists in the Property Securities (Global) category have weathered the tough global property securities market by keeping a close eye on fundamentals.

In a difficult year for the market, the overall winner of the category is RREEF Alternative Investments for its Global (Ex Australia) Property Securities Fund.

Lonsec said RREEF won the category because of its large Asia-based team, regional asset allocation and access to real-time property market data, among other things.

RREEF global head of real estate securities John Robertson told Money Management that RREEF had stayed ahead of the market by keeping a close eye on direct real estate prices and examining how they might impact stock prices.

“Our fundamentals-based philosophy focuses on underlying valuation, and our process incorporates both top-down regional allocation and bottom-up stock selection,” he said.

Robertson said that the fund has 30 dedicated analysts and portfolio managers backed by trading and operations teams and RREEF’s direct property transactional and research teams.

“We’ve continued to perform well, achieving over 200 basis points of excess return since the inception of the fund in October 2004,” he said.

ING Investment Management (INGIM) is a finalist in this category for its W/S Global Property Securities Fund.

INGIM director, listed property, Justin Blaess believes that ING’s success can be attributed in part to its engagement with local markets.

“The ING portfolio benefits from investment decisions made by local property analysts who are switched on to market noise, property fundamentals and pricing anomalies within their individual local markets,” he said.

“Our strategy has been to tilt our portfolio towards conservatively managed companies, defensive property types and rock solid balance sheets,” he said.

ING is projecting earnings growth deceleration across the property securities industry over 2008 and 2009.

“However, we believe a recession has already been priced into the share price of real estate stocks and many are now trading at a heavy discount to their net asset value,” Blaess said.

The other finalist in this category is AMP Capital for its Global Property Securities Fund.

“We have one of the longest performance track records in the market,” AMP Capital global portfolio securities manager Brett Ward said.

AMP responded to troubled world property markets by acting quickly to reduce the level of risk at both a country and stock level, Ward said.

“On a country level, we were underweight in the markets with high levels of exposure to the financial services sector, specifically the UK and US markets, generally favouring markets with strong macro fundamentals and stronger property market fundamentals,” he said.