Speaking to InvestorDaily, SQM managing director Louis Christopher said the global listed property sector has experienced recent strong growth; however, inflows remain a headwind.
“The sector has recorded some very robust returns over the last 12 months,” Mr Christopher said, “so it’s been a pretty positive year for existing investors, as for the funds themselves.
“But despite the returns over the past 12 months, there has not really been a major increase in fund flows from Australian investors, so that’s been a little bit disappointing for some of the fund managers.
“Generally, it’s been a tough year for many of them, which has really been about the tough consecutive fifth year in a row when it comes to fund flows.”
Mr Christopher said low inflows might be the result of investors who remember having a “rough ride” with listed property during the global financial crisis.
However, he added that investment managers have changed their financial modelling of these stocks as a result of the crisis.
With that in mind, Mr Christopher said he expects interest in the sector to pick up if the hunt for yield continues.
“In more recent weeks, along with the more recent corrections in the equity market global REITS have also had a bit of a correction, so it seems as though we’re entering into a little more volatile times with the market,” Mr Christopher said.
“However, I think [there will be] the eventual return to favour of the sector, particularly if we have a continued local rally in A-REITS in this country.”
SQM released individual ratings for six global property funds in its upcoming 2013 sector review, with the median rating for the funds increasing to 4.1 stars from the previous year's rating of 4 stars.
The BT Wholesale Global Property Securities Fund remained unchanged at the highest rating of 4.5 stars, while the AMP Capital Global Property Securities Fund was the only fund to be upgraded, from 4 stars in 2012 to 4.25.
