An offshore advantage
Listed property offers portfolio diversification
Listed property groups that have diversified abroad offer a hedge against tough local conditions, writes Johann Barnard
With local and global markets appearing to rise in spite of — rather than because of — economic fundamentals, investors in property funds have every reason to be cautious. But as listed property groups expand internationally, investors may tend more to cautious optimism than downright circumspection. Property has traditionally been seen as a staid, defensive — even judicious — asset class. But with the economy facing strong headwinds, even this sector may be in for some pain as growth and consumer confidence wane. For quite some time, though, growth in property values and investor demand have driven returns from listed property funds above those of the FTSE/JSE all share index (Alsi). Over a 10-year period, for instance, the FTSE/JSE SA listed property index (SAPY) returned 13.91% compared with the Alsi’s 9.54%. Returns over the past five years are more or less even, at about 12.6%. This is the level the SAPY retained for the three-year period, while Alsi returns dropped to little m...
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