Stephen Cranston Associate editor

The real estate sector may have only 4% of the assets of the collective investment schemes industry, but it is still a substantial R81.4bn. Part of the success of the property sector over the past 15 years can be explained by the increased demand for retailer investors. They made the right call by favouring property over bonds. Even though bonds represent a larger, more liquid pool of funds, there is just R61.7bn in bond funds (now called variable term funds). All the large fund houses run property funds, with the exception of Foord and Allan Gray. These businesses have taken a conscious decision to keep their ranges tight. Property has given a number of specialist black economic empowerment property firms the chance to emerge. Sesfikile has a respected unit trust and Meago ran Absa’s property fund but doesn’t have a fund right now (no doubt it will correct this soon).Even though the property sector is relatively small, genuine excess return, or alpha, has often been scarce. There i...

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