Folkestone Maxim Asset Management Labeled No.1 Performing Fund

Folkestone Maxim A-Reit Securities Fund is pleased to announce that they have been reported as the No.1 performing fund for 3 years in the Mercer Investment Performance Survey of Australian Real Estate Securities (REIT).

KEY TAKEAWAYS:

• The Mercer Survey reports that the Fund returned 15.5% (pre fees) for the year compared to 13.5% for the median manager in the survey.
• The Survey also reported that over three years, the Fund has generated a return of 20.2% p.a (pre fees) compared to 18.0% p.a for both the median manager and the Index.
• Two of the Fund’s biggest contributors to performance in the past year were Rural Funds Group and Asia Pacific Data Centres which returned 35.3% and 28.8% respectively.
• Both securities were outside the Index when the Fund first invested in them, with Rural Funds entering the Index in March 2016. The Fund was attracted to both securities given the strong top-down thematic associated with the agricultural sector in the case of Rural Funds and the massive increase in cloud computing and consequent demand for data centres.

Folkestone (ASX:FLK) is an ASX listed real estate fund manager and developer providing real estate wealth solutions. The Fund management platform, has more than $1.0 billion under management also offering listed and unlisted real estate funds to private clients and select institutional investors.

“Mr Winston Sammut, Portfolio Manager, said “we are delighted with the strong performance of the Fund versus both other A-REIT securities fund managers and the Index, particularly in the past year. Whilst there is on-going discussion in the market about whether active managers in the A-REIT sector can add value, we have demonstrated through our high conviction active strategy that we can consistently outperform the Index over time.”

“Given our high conviction strategy we are not wedded to just investing in large cap A-REITs. The largest 8 A-REIT securities comprise 82% of the Index and the retail sector comprises close to 60% of the Index, creating significant concentration risk. Our strategy allows us to look for securities inside and outside the Index. At the end of 2016, the Fund was holding just 12 of the 30 A-REIT securities in the Index and 5 securities outside the Index” said Mr Sammut.

Mr Sammut said “it is our ability to look outside the big end of town A-REITs that allows the Fund to take advantage of mispriced opportunities that often occur in the mid and smaller cap A-REITs. Going into 2017, we have several views that differ significantly from the Index allocation. Our largest sector overweight is social infrastructure which currently represents 7.3% of the Fund compared to 0.5% of the Index while the largest underweight sector is retail which represents 35.0% of the Fund compared to 48.4% of the Index.

“The social infrastructure sector is benefiting from strong demographics driving demand, investors chasing yield and longer dated lease structures which social infrastructure assets such as childcare and medical typically have. Our underweight in the retail sector is driven by our view that retail is facing enormous headwinds from internet retailing, a competitive retail marketplace with growing number of international retailers entering the market and on-going margin compression” said Mr Sammut.

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