Posted inHead To Head

HEAD-TO-HEAD: Fidelity vs NNIP

FSA compares the Fidelity Global Property Fund and the NN (L) Global Real Estate Fund.
by Francis Nikolai Acosta
Globally listed property funds

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Ronald Van Genderen, Morningstar

The global property funds market have not been yielding positive results as the majority of them are not able to beat their benchmark indices, according to Ronald Van Genderen, Amsterdam-based fund analyst at Morningstar.

“That is really a problem within the property fund market. On the long-term, we don’t see many active funds outperforming the market in general.”

Indeed, over a three-year period, the property fund sector for SFC-authorised funds in Hong Kong delivered only 7.05%, while the FTSE EPRA/NAREIT Global Index, a widely used index for property funds, returned 12.77%, according to data from FE.

Van Genderen explained that the stocks in the property sector have become correlated to each other quite strongly, which makes it difficult for managers to outperform the benchmark.

He added that Japanese real estate investment trusts (JREITs), which are a key part of the property funds sector, have become very expensive because the Bank of Japan, the country’s central bank, has been buying a lot of JREITs as part of its quantitative easing programme.

“Active managers have been struggling to excel in Japan because of that.”

Under this backdrop, FSA compares two global listed property funds: the Fidelity Global Property Fund and the NN (L) Global Real Estate Fund.

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