Page 181 - Profile's Unit Trusts and Collective Investments 2021 issue 2

Fund Manager Interviews

In terms of risk management, what methods or strategies are you able to use to protect your
clients' investments?
We are active portfolio managers and spend a great deal of time positioning the portfolio to
best perform during periods of market stress. Uncertainty is a constant in the investment world,
and we believe that risk is best managed through portfolio diversification (across countries, sectors
and currencies), cash exposure, and the selection of global best in class companies. We constantly
monitor our portfolio concentration, country and currency risk exposures, and believe that active
portfolio management is superior to passive during periods of extreme market risk.
Please comment on the year ahead and, if possible, estimate the performance of your fund
over 2 or 3 years. What are your targets and objectives for the year ahead?
The year ahead is certainly filled with challenges as the globe continues to deal with the
devastating effects of Covid-19's impact. The pandemic still has a long path to go despite the
ramping up of global vaccinations and the concern remains the emergence of new variants and the
low levels of vaccinations in the developing world. Global listed property has had a good 2021 to
date, the Reitway BCI Global Property fund is up 10.7% in ZAR year to date at the end of June and
Reitway continues to remain positive that global listed property and its diverse sectors will
continue to deliver value in this volatile environment. We will continue to search for the best
pockets of global opportunity and work to return positive hard currency returns for our investors.
We aim for double-digit USD-denominated returns over rolling three year periods. The only
certainty ahead remains volatility.
What are your expectations for the property sector?
We remain positive that the global property sector will continue its recovery from 2020's Covid
sell off and 2021's rotation trade has shown the market strongly moving back into global listed
property which has been one of the top performing asset classes in 2021. However, despite retail’s
strong recovery in Q4 2020 we believe that the sector will continue to face the challenges of slow
economic recovery, and its transformative challenges from online shopping, for several years still.
Logistics will remain robust; we are actively monitoring the supply/demand balance with so many
new facilities being built, but the global outlook is positive. Residential should also remain a
strong performer in several markets and we remain positive on European multifamily
(apartments) and US single family rentals.
Could you identify three shares that fall within your universe that you think will perform well
in the medium term?
We do not provide individual company names publicly, but we remain the most positive on
best in class companies in the European and global logistics sector, US residential REITs and
global self-storage companies.
Offshore investments are heavily influenced by the rand. Please give your view on the rand
over the next 1, 3 and 5 years.
Our answer to this perennial question is consistently that there is only one thing certain about
the rand, and that is that it will be volatile. We believe that over the long term the rand will
continue to depreciate versus the US dollar and it is highly unlikely that the rand will cease to
display the volatility, both positive and negative, that it has exhibited over the past. The best that a
rand-based investor can do is not exhibit irrational fear or excessive optimism with respect to the
potential movements in the rand over time in terms of their allocation to offshore securities.

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Profile’s Unit Trusts & Collective Investments — Understanding Unit Trusts