HEAD-TO-HEAD: Janus Henderson vs Robeco

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Pictured: Luke Ng, senior VP of research at FE Advisory Asia

Direct investment in properties, in particular in Hong Kong, or buying shares in individual listed real estate investment trusts (REITs), has been shown to deliver better returns than most property mutual funds.

Nevertheless, for reasons of liquidity, size of investment, portfolio limitations, or desire for global diversification, property mutual funds are a viable option for many investors.

As an alternative asset class, the sector provides diversification from equities and fixed income, but also different subsectors within real estate, such as residential, retail, office and industrial tend to run in differing cycles and have slightly different outlooks.

The sector has been evolving. Property equities fund managers increasingly look to new opportunities in areas related to e-commerce, such as logistics facilities and data centres.

All real estate investments are inherently bound to a location, so analysis of local economy is crucial to success for a property equity fund manager. A global fund manager would benefit from local expertise in the regions in which the fund invests.

“There are certain sectors that have bottomed out in Asia, for example, Hong Kong retail property, which was hit over the last few years,” said Luke Ng, senior VP of research at FE Advisory Asia. “Singapore retail property is seeing better opportunities at the moment.”

And while US property is “probably at the high end of the cycle at the moment”, according to Ng, “there could be opportunity in Europe, in particular Germany, in residential and office property”, he said.

FSA compares two global property mutual funds: the Henderson Horizon Global Property Equities Fund (managed by Janus Henderson Investments) and the Robeco Property Equities Fund. Ng provides the analysis.

Data: FE, Janus Henderson, Robeco

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