Winner: best property securities fund
In May 2019 the Pendal Property Securities Fund was awarded Best Property Securities Fund at the Money Management Fund Manager of the Year Awards.
In announcing the award, Money Management and its research partner Lonsec stated:
The Pendal Property Securities Fund has a ‘core’ investment style with a ‘quality’ bias, and is managed by highly-experienced and long-serving Portfolio Managers Peter Davidson and Julia Forrest. The team benefits from extensive industry contacts and sharing of ideas and news flow ideas from Pendal’s other asset class teams. The Fund has an extensive track record of outperforming peers over multiple investment cycles.
Responding to the award, Pendal’s Head of Listed Property Pete Davidson addressed some key questions facing the sector:
1. What do you think drove your strong performance in the last year? How did the management of the Fund contribute to this?
• Our focus on having a valuation toolkit and using a variety of valuation measures meant we could identify value in stocks that had strong equity-style valuation.
• Traditional NTA based stock valuation lagged. Many NTA supported stocks became value traps rather than traditional value.
• There was a strong divergence in stock performance, which was better for active managers.
2. What asset allocations and/or market conditions did you find most advantageous?
• Our overweights in fund managers and industrial, logistics stocks supported our performance.
• Falling bond rates have supported fund managers.
• Underweights to traditional mall / retail assisted our performance. These stocks have been impacted by the weakening macro economic environment in Australia.
3. Do you anticipate continued strong performance?
• Yes, our portfolio is positioned in pockets of growth and good reliable cash flow, such as child care and traditional industrial property, which will outperform the slowing economy.
• Yes, we are now overweight the Perth and Auckland office markets which have very good and improving fundamentals.
• Our underweights to traditional mall retail should continue to perform. We believe asset values will decline in this sector over the coming year.