HEAD-TO-HEAD: Janus Henderson vs Robeco

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The two funds are very similar in terms of investment strategy, according to Ng. Both are primarily driven by bottom-up stock picking and do not make big geographic or sub-sector bets. They do, however, take into accounts global trends when identifying companies with the best outlook.

The Henderson fund follows the FTSE EPRA/NAREIT Developed Index, tracking the performance of listed real estate companies and REITsworldwide.

The fund has around 51% exposure to the US, slightly below that of the index (53%). It currently has 9% of the portfolio invested in Hong Kong, another 9% in Japan and 5%-6% in the UK and Australia.

The managers of the Henderson fund look for companies with what they consider low leverage, less debt than peer companies and quality assets, according to Ng. They also look at the supply-demand dynamics and structural changes in the market.

In comparison, the Robeco fund’s benchmark is the S&P Developed Property Index. The index has slightly lower allocation to the US than the FTSE index, and a higher allocation to Japan. The fund follows these allocations very closely.

The managers of the Robeco fund “look at assets in the prime areas and tend to focus on properties that are used in the tech industry, such as data centers”, Ng said.

They also integrate ESG (environmental, social and corporate governance) factors in their process, which Ng highlighted as one of the key differentiators between the two funds.

Robeco’s models use sustainability data from Robeco SAM, a subsidiary, for its fundamental and quantitative analysis, focusing on environmental issues, according to the fund’s factsheet.

The rationale behind ESG integration is that properties that implement sustainability measures tend to have better rental rates, occupancy levels and contract renewals than those that do not, according to Ng.

“Both funds focus on developed markets,” Ng said. “Even though they follow different benchmarks, their composition is quite similar.” Besides similarities in regional exposures, both funds allocate a similar share, around 70%, to REIT stocks.

Ng said the differentiation between the two funds lies in the skills of the management teams in picking the right investments in each region.

The top holding in both portfolios, close to 5%, is Simon Property Group, a US company. Both also have Hong Kong’s Sun Hung Kai Properties and Japan’s Mitsui Fudosan among their top ten holdings. The level of concentration is also similar, with top ten holdings accounting for 32%-35% of each portfolio.

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