Launched in November 2007 the Fund aims to generate positive income and capital returns over a medium to long term investment horizon.

The Fund:

  • Offers diversified global real estate exposure across regions, countries, currencies and real estate sub sectors

  • Is managed by dedicated real estate specialists with direct real estate market experience

  • Invests in developed markets adopting a detailed discounted cash flow forecast with a scientific approach to the risk associated with those flows

Meet the Catalyst Team

Andre Stadler
Andre Stadler
CFA, Founder & Portfolio Manager
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Jamie Boyes
Jamie Boyes
CA (SA), Portfolio Manager & Director
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Tiffany Jones
Tiffany Jones
CA (SA), Senior Analyst
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Theodore Freysen
Theodore Freysen
CA (SA) Senior Analyst
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Lance Bezuidenhout
Lance Bezuidenhout
CFA, Senior Analyst
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Ryan Cloete
Ryan Cloete
CA (SA) Senior Analyst
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Why invest in the fund?

  • Catalyst Fund Managers specialise in the management of listed property securities only.

  • Our senior portfolio managers have direct property experience, which enables them to have a better understanding of how a valuation should be adjusted for capital expenditure.

  • We are risk-adjusted, long term total return focused.

  • The global listed property universe offers potential investors great diversification to various listed property sub-sectors, i.e. >50% of our Catalyst Global Real Estate UCITS Fund is allocated to niche sub-sectors (including lab space, towers, data centers, warehousing and single-family residential homes), as opposed to the more traditional retail and office sub-sectors.

  • Real estate has managed to grow earnings and dividends in excess of inflation over the long term and total return on REITs has proven to be a good inflation hedge over time. Past performance is not a guide to future performance.

We have a standard investment philosophy which is long term, total return driven. The process is bottom up and our primary valuation methodology is a discounted cash flow.

We determine an intrinsic value for each stock, based on a required rate of return for each stock, a 10-year (or five-year) cash flow and the sustainable earnings growth for that stock. This is compared to the current stock price and a relative value is calculated. The portfolio is then constructed based on a combination of what the relative value is and what the benchmark weighting is.

Although the portfolio is constructed based on a bottom-up process, the portfolio manager will also look at top-down allocations (sector and regional), to ensure that we manage concentration risk on a geographic and sectoral level.

Due to the diversity of the geographical and sectoral diversity which the listed real estate universe offers, we can construct a portfolio that is able to take advantage of economic and sector growth opportunities.

We aim to deliver 2-3% alpha per annum in USD.

The intention is to provide an attractive risk-adjusted return to form part of a multi asset class portfolio

Jamie Boyes, Fund Manager

Fund Commentary

September 2021

The fund benchmark, the FTSE EPRA/NAREIT Developed Rental Net Total Return Index, recorded a net total USD return of -6.18% for the month of September. The best performing listed real estate market was Australia which recorded a total USD return of 0.20% for the month. Europe ex-UK recorded the lowest total USD return of -10.52%.

The best performing sectors globally for the month in USD were Hotels (0.50%), Malls (-3.26%), Strip Retail (-4.01%), Office (-4.76%), and Apartments (-5.17%). The worst performing sectors were Towers (-12.61%), Net Lease (-8.59%), Storage (-8.25%), Manufactured Housing (-7.75%), Student Housing (-7.73%).

Year to date, the fund benchmark recorded a net total USD return of 15.30%. The best performing listed real estate market year to date is the US, which recorded a total USD return of 22.83%. Hong Kong recorded the lowest total USD return of -2.64% year to date.

The best performing sectors globally year to date in USD were Storage (46.35%), Single Family Housing (42.02%), Manufactured Housing (41.35%), Apartments (29.28%), and Strip Retail (28.17%). The worst performing sectors were Towers (-18.91%), Hotels (6.19%), Data Centres (9.14%), Office (11.45%), and Diversified (11.79%).

After delivering strong returns this year, the global listed real estate market was also affected by the general sell off that occurred in bonds and equities in September. Several factors combined to contribute to the risk-off move in markets. Concerns about the ripple effects of a potential collapse of Evergrande, one of the largest property developers in China, hints of tapering from central banks, concerns about the Delta variant infection rates, US government debt ceiling worries, supply chain issues, and several weak economic data releases all probably contributed to the pullback.

Relative to fixed income the real estate sector screens cheap, with expected total return spreads near all-time highs. The estimated forward FAD (Funds Available for Distribution) yield for the sector is 4.21%. Based on our earnings estimates and market break-even inflation expectations, we expect the global listed real estate sector to deliver approximately 8.0% return for buy and hold investors over the medium term. Within the real estate universe, more attractively priced opportunities exist in specific real estate sectors and stocks, providing opportunities for astute active managers.

Source of data: Bloomberg, Company Information and Catalyst Fund Managers

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Fund Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets.

Investments in real estate securities can carry the same risks as investing directly in real estate itself. Real estate prices move in response to a variety of factors, including local, regional and national economic and political conditions, interest rates and tax considerations. The value of shares may move down in response to stock market conditions, changes in the economy or changes in a particular company's stock price.

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