The fund was launched in August 2018 to invest in listed securities that derive their value from underlying real assets and targets CPI +4% over a full investment cycle. Investments can be via REITs, investment trusts or specialist companies with a focus on physical assets.
Introducing Sanlam Real Assets Fund
February 2020 - Latest commentary
News of a sharp uptick in coronavirus cases outside of China triggered an abrupt sell-off across global equity markets into month end. The last week of the month recorded the largest weekly market declines in the US and UK since the global financial crisis, and sent investors flocking to safe haven assets. Over the month the MSCI World closed down -8.5% whilst gains in 10 year US and UK government bonds pushed yields down to 1.15% and 0.44% respectively. Whilst the impact of the virus on the economic and social welfare of affected countries remains uncertain, market volatility will remain the order of the day.
During a month of considerable volatility the Real Assets fund was not immune to the negative market reaction. On a relative basis the portfolio held up well, recording a drawdown of -5.9% vs MSCI World at -12.0%. Over the month all strategies contributed negatively to performance. Full year updates across a number of holdings revealed more robust balance sheets and continued earnings growth. This was largely attributable to contracted uplifts coming through. Acquisitions in February included US recycled energy projects, US data centres, a UK supermarket, wind farms in the UK and Ireland, social housing properties and a residential property development. One of our holdings announced the disposal of 2 A380 aircraft, which were sold at a price significantly above market expectations.
We participated in four capital raises in February, the proceeds of which will be deployed into the acquisition of logistics facilities, residential properties, infrastructure debt and renewable projects.
Previous months’ commentaries are contained within the fund factsheets.