SQM Ratings Update

SQM Research has released the ratings for four Global Property Securities Funds and two Asian Property Securities Funds as part of its 2016 Property Securities Sector Review.

SQM Research has analysed six funds as part of its 2016 Global Property Securities Fund Review. The six funds rated that form part of this report are: BT Wholesale Property Securities Fund, Principal Global Property Securities Fund, Resolution Capital Global Property Securities, Invesco Wholesale Global Property Securities Fund and APN Asian AREIT Fund and Premium Asia Property Fund.

Three funds rated as part of the global property securities fund maintained the ratings received in June 2015. BT Wholesale Global Property Securities Fund received the highest rating of 4½-stars, unchanged from the previous year. Resolution Capital Global Property Securities Fund received the second highest rating of 4¼-stars, unchanged from last year. Principal Global Property Securities Fund maintained its 4-stars rating. The Invesco Wholesale Global Property Securities Fund was previously rated by SQM Research in 2011. For the 2016 review the fund received a 3¾-stars rating.

Global Property Securities Funds

APN Asian REIT Fund maintained a rating of 3¾-stars with a positive outlook. SQM Research will continue to monitor the impact of the integration of the investment team into the Melbourne office and the Fund’s relative and absolute performance over the coming year. Premium Asian Property Fund was last rated by SQM Research back in 2012, it received 3¾-stars rating for 2016.

Asian Property Securities Funds

Market Outlook

The spread between yields on property and government bonds remain elevated despite low property yields. In the medium to long term, higher interest rates have the potential to narrow spreads and drive cap rate pressure upwards. However as inflationary expectations continue to fall, worldwide, a higher interest rate environment seems increasingly more distant.

Overall, SQM’s expectations for the remainder of 2016 and 2017 is for outperformance of higher beta REITs, yet underperformance of fund managers who maintain the view that risk free rates will rise due to potential inflationary pressures.

To access this report, CLICK HERE.

For further information:

Louis Christopher
Managing Director
SQM Research
Tel: (02) 9220 4666
Email: louis@sqmresearch.com.au

About SQM Research

SQM Research Pty Ltd is a respected Australian investment research house, specialising in providing ratings and data across all major asset classes.

For more information, please visit www.sqmresearch.com.au

Research Methodology

In general, the assessment approach adopted by SQM Research incorporates a combination of qualitative and quantitative research techniques to assess property investment products,

Information generated is passed through the SQM Research assessment model at the completion of the assessment process. The assessment model generates a product score, which correlates to a specific star rating (out of a maximum of five stars). Each star rating covers a scoring range, allowing products to be ranked within quarter star increments.

Following are descriptions for each of the star ratings, which have been developed as a guide for dealer group research teams and investment committees:

Following are descriptions for each of the star ratings, which have been developed as a guide for dealer group research teams and investment committees:
4.5 stars and above – Outstanding. Highly suitable for inclusion on APLs.
4 stars to 4.25 stars – Superior. Suitable for inclusion on most APLs.
3.75 stars – Favourable. Consider for APL inclusion.
3.5 stars – Acceptable. Consider for APL inclusion, subject to advice restrictions.
3.25 stars – Caution required. Not suitable for most APLs.
3 stars – Strong caution required. Not suitable for most APLs.
Below 3 stars – Avoid or redeem. Unapproved.
Hold – The rating is currently suspended until SQM Research receives further information. A rating is typically put on hold for a period of 2 days to 4 weeks.
Withdrawn – The rating is no longer applicable. Significant issues have arisen, and investors should avoid or redeem units in the fund.