Best performing AREIT fund not entirely revalued: Morningstar
While the Australian real estate investment trust (AREIT) sector continued to disappoint investors in the first quarter of 2009, some funds were supported by a lack of valuation pressure.
In Morningstar’s first quarterly investment round up for 2009, the APN Property Income Fund remained the best performing AREIT fund, having outpaced the index by over 8 per cent for the quarter.
Morningstar attributed this in part to the fund’s exposure to unlisted property investments, which didn’t suffer the substantial revaluations of their listed counterparts.
Despite achieving a small positive return of 0.40 per cent for March, the AREIT sector lost a further 24.11 per cent over the quarter, which left it down 58.05 per cent for the year to March 31, 2009.
Morningstar said the sector was weighed down by falling asset values and some large capital raisings over the quarter.
Meanwhile, large-cap domestic stocks clawed back some of their losses in January and February, with growth-orientated stocks like those in mining and energy together with banks performing well over the quarter.
But it was more defensive sectors such as healthcare and telecommunications that lagged behind.
Morningstar found the best performing segment of the large-cap market was resources, up 7.92 per cent, while the industrials dragged down the overall performance and was down 5.57 per cent.
Value style Australian share fund managers fared marginally better in March, however the best returns over the quarter came from growth-style fund managers, the research found.
Meanwhile, a flood in commodity prices and an improved outlook for Chinese growth breathed some life into small-cap stocks over the March quarter, Morningstar reported.
However, this wasn’t enough to overcome previous weakness, and small-cap stocks remained in negative territory for the quarter.
Meanwhile, global property funds as a group performed better during March, but were still down -21.68 per cent on average.
On the Australian bond fund front, the index managed to produce a 0.28 per cent return for the quarter to be up 12.77 per cent for the year to March 31, 2009.
However, positive returns in March for multi-sector funds were not enough to draw quarterly returns out of negative territory.
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