REAL ESTATE – Fidelity International has launched an Asia Pacific property fund, which will invest in real estate companies in both developed and emerging markets in the region, it has announced.
"The fund will allow investors to benefit from the fact that Asian Pacific markets are generally at different stages of development, and offer different growth potential. Blending their securities into a single fund, provides investors with the twin-track potential of higher growth and lower volatility," it said.
"Moreover, the Asia Pacific property market has relatively low correlation with property markets in Europe and the US," the firm added.
"The FF Asia Pacific Property fund aims to achieve a combination of income and long-term capital growth, primarily from investments in securities of companies principally engaged in the real estate industry and other property-related investments in the region, including Japan, Australia and New Zealand," it explained.
The open-ended fund is in part targeted at institutional investors without their own expertise in the region, a Fidelity spokesman indicated. "They can participate under institutional conditions," he said.
The Asia Pacific portfolio will be managed by Polly Kwan. She is supported by a 31-strong team of regional and country-based investment analysts. The team includes 18 property analysts, of whom six specialise in Asian property research.
Kwan will focus on specific companies that meet investment criteria, rather than benchmark weightings. She will also target a low turnover, with an emphasis on the long-term property market cycle, rather than short-term trends. The expected number of holdings is 40 to 60, Fidelity said.
"Growth in the Asian property securities and real estate investment trust markets is being driven by the expanding Asia Pacific economy, where factors such as rising middle class incomes, strong GDP growth, urbanisation and increasing affluence are all benefiting capital value," Kwan commented.
"Over the last five years, Asian Pacific real estate markets have delivered strong returns, and the outlook continues to be positive."
Emerging Asia Pacific is a region of fast-growing economies, with young populations, higher savings, expanding labour forces, rapid urbanisation and industrialisation. Together with the mature economies of developed Asia Pacific, they deliver the ideal combination of high growth potential, steady yield and lower volatility," the portfolio manager pointed out.