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FOLKESTONE MAXIM A-REIT SECURITIES FUND
KEY STATISTICS
as at 30 April 2015
APRIL 2015 REPORT
Status
Open
Fund Maturity
Open Ended
Accumulation Index has returned +26.0%
compared to the broader equity market’s
return of +10.2%, outperforming by 15.8%.
Investments
Primarily A-REITS
Investment Horizon
3-5 years
Distribution Frequency
Quarterly
The gap between best to worst performing
stock in the S&P ASX 300 A-REIT Index in
April was 10.4%. Astro Japan Property
Group (AJA ) was the best performing AREIT in the Index, returning 5.8% followed
by SCA Property Group (SCP +5.4%) and
Generation Healthcare (GHC +4.8%). The
three worst performers were Investa Office
Fund (IOF -4.6%), Federation Centres (FDC
-3.0% and Cromwell Property Group (CMW
-2.6%).
Fund Inception Date
October 2005
Pricing
Daily
Buy/Sell Spread
0.25%/0.25%
Total MER
0.95% up to $50m
Then 0.85% >
$50m
ARSN
116 193 563
APIR Code
COL0001AU
MARKET REVIEW
Following the release of weaker than
expected US GDP growth recorded for the
st
1
quarter of 2015 of 0.2% versus
consensus of 1.0%, market expectations for
timing of rate hikes in the USA were pushed
st
out further in the year. Positive 1 quarter
earnings results provided support for the
S&P500 Index which gained 0.9% in April.
In Europe, on the back of a stronger Euro
and mixed earnings results, the Euro
STOXX50 index fell 2.2% over the month.
In Australia, the S&P ASX 200 Index lost
ground (-1.7%) although resource stocks
posted solid gains as iron ore and the oil
price rebounded from their lows. The
Reserve Bank left the cash rate unchanged
at 2.25% at its April Board meeting whilst
the yield on 90 Day Bank Bills only rose 2
basis point to 2.24%. However, 10 Year
Bonds rose 31 basis points, ending the
month at 2.60% as the Aussie dollar rose
3.9% to US$0.7905 having briefly breached
US$0.80 near month end.
The S&P/ASX 300 A-REIT Accumulation
Index returned -1.0% underperforming the
broader equity market by 162 basis points.
Over the 12 month period ended 30 April
2015, the S&P/ASX 300 A-REIT
ACTIVITY
PLATFORMS
SCA Property Group (SCP) announced the
acquisition of the Whitsunday Shopping
Centre in Airlie Beach, Queensland for
$46.9m on a fully leased yield of 8.5% as
the vendor provided a 2 year rental
guarantee. Abacus Property Group (ABP)
sold the Aspley Village Shopping Centre for
$32.25m with settlement occurring in June
2015 and reflecting a passing yield of 9.5%.
Dexus Property Group (DXS) raised $400m
by way of a capital raising priced at $7.32
with funds initially used to reduce debt but
subsequently to enable the Group to take
Macquarie Wrap Solutions
Netwealth
Powerwrap
Symetry
HUB24
TOP 5 HOLDINGS
(by Portfolio Weight)
Westfield Corporation
Scentre Group
Stockland Group
Goodman Group
GPT Group
Fund Performance to 30 April 2015
Folkestone Maxim A-REIT Securities Fund
Apr 2015
%
3 Months
%
1 Year
% p.a.
3 Years
% p.a.
5 Years
% p.a.
7 Years
% p.a.
Growth
-0.33
+1.74
+21.78
+13.97
+8.00
-1.35
-1.59
Income Return
+0.00
+0.74
+4.96
+5.83
+5.36
+3.13
+4.76
Total Return (After Fees but Before Tax)**
-0.33
+2.48
+26.73
+19.80
+13.36
+1.78
+3.18
S&P/ASX 300 A-REIT Accumulation Index
-0.99
+0.65
+25.97
+20.03
+13.31
+1.50
+2.22
Value Add
+0.66
+1.84
+0.76
-0.23
+0.04
+0.28
+0.95
*Fund inception date October 2005. **Please note the Fund’s management fee was reduced on 16 May 2014. The Fund’s after fees but before tax performance only reflects the new management fee from this date.
Since Inception
% p.a.*
advantage of acquisition opportunities as
they occur.
The GPT Group (GPT) announced that its
CEO, Michael Cameron resigned, effective
in October 2015, having accepted the CEO
role at Suncorp. In addition to a number of
internal candidates being considered, the
Board announced its intention to also
consider external candidates.
Generation Healthcare (GHC) undertook a
$52m capital raising to fund the acquisition
of a portfolio of aged care properties for a
combined amount of $45.8m and further
expanding the A-REIT sectors exposure to
social infrastructure.
SECTOR VALUATION
At April month end, the A-REIT sector
reflected a circa 7.0% premium to Net
Asset Values and offered a FY16 DPS
yield of 5.1%, equating to a 286 basis
points premium to 90 day Bank Bills and a
250 basis points premium to 10 year
bonds.
OUTLOOK
Financial markets continue to expect a rate
cut which should provide support to
investments generating steady and reliable
income streams and which include A-REITs.
Competition for assets continues to be
strong pushing asset prices higher
particularly for Sydney and Melbourne
office, whilst operating conditions in
Brisbane and Perth office markets remain
difficult in light of rising office vacancy levels
in these markets.
The outlook for residential markets is still
positive however, further upside is
considered likely to be limited particularly in
the medium density sector due to the level
of approvals which are of historic highs.
ASSET ALLOCATION
As at 30 April 2015
Retail sales data for February was
pleasing, supported by lower fuel prices.
Further support for retail is likely on the back
of a further rate cut.
FUND PERFORMANCE
In April, the Fund returned -0.33%, on an
after
fees
but
before
tax
basis,
outperforming the Fund’s Benchmark return
of -0.99%. For the 12 months ended 30 April
2015, the Fund returned +26.70%
outperforming the Benchmark return of
+25.97%. Since inception (October 2005)
the Fund has returned +3.20% p.a.
outperforming its Benchmark return of
2.22% p.a. on an after fees but before tax
basis.
Positive contributions to April returns came
from the Fund’s exposure to Rural Funds
Group (RFF +14.9%), APN Property Group
(APD +7.5%) and a Zero exposure to
Federation Centres (FDC -3.0%).
S&P/ASX 300 A-REIT - 84.6%
Ex S&P/ASX 300 A-REIT - 9.5%
Real Estate Managers & Developers - 4.5%
Cash - 0.7%
Unlisted - 0.7%
SECTOR SPLIT
As at 30 April 2015
Detracting from returns were holdings in
GPT Metropolitan Office Fund (GMF -4.1%),
Cedar Woods (CWP -3.4%) and Dexus
Property Group (DXS -2.6%).
At April month end, the Fund’s investments
comprised 17 ASX listed securities, totaling
98.6% of the portfolio, 13 of which were
constituents of the S&P/ASX 300 A-REIT
Index. The remaining 4 listed investments
held, sit outside the Index. The Fund’s
exposure to unlisted securities represents
0.7% of the portfolio whilst
the 0.7%
balance of exposure was held in
Cash/Liquid investments.
Folkestone Maxim Asset
Management Ltd
ACN 104 512 978 AFSL 238349
Sydney Office
Level 10, 60 Carrington Street
Sydney NSW 2000
Melbourne Office
Level 12, 15 William Street
Melbourne VIC 3000
e: [email protected]
www.folkestone.com.au
t: +61 2 8667 2800
f: +61 2 8667 2880
t: +61 3 8601 2092
f: +61 3 9200 2282
Social Infrastructure A-REIT - 5.9%
Industrial A-REIT - 13.6%
Retail A-REIT - 37.3%
Diversified A-REIT - 20.3%
Office A-REIT - 12.8%
Other A-REIT - 4.9%
Real Estate Managers & Developers - 4.5%
Cash - 0.7%
Unlisted - 0.7%
Please note: Numbers in the graphs may not add
up to 100 due to rounding.