At the end of April 2013, the Consilia Capital funds database was composed of 736 funds with total assets under management of $295bn (€229.46bn).

In addition to dedicated real estate securities funds, which are categorised by geographic mandate (global, Asian, US, European, and so on), it also incorporates two categories of complementary and growing sector funds – real assets and infrastructure funds. The reason for including these funds is that infrastructure, real asset and real estate debt funds are viewed by asset allocators, consultants and investors as a way of achieving at least some of the risk and return characteristics that listed real estate funds have been previously expected to provide.

These characteristics would include stable cash flows producing consistent and growing dividend yields; a lower level of correlation with the equity market providing diversification benefits; some form of inflation hedging, and greater liquidity than the market of the underlying asset backing. If the real estate debt sector grows as expected then this will also be introduced as a separate category in our database.

By definition, the performance of dedicated securities funds will be closely related to the performance of their underlying investable companies. As we can see in table 1, it has been the expansionary, inflation-targeted polices of the Japanese government that has pushed Japanese developers and REITs higher in the first quarter, leading to a dramatic outperformance of Japanese funds in the period. Two points are worth noting: first, all returns are rebased to US dollars for consistency; and second, we have taken average returns for the funds in each mandate.

Figure 2, below, shows the leading funds’ performance, with a minimum size requirement of $100m in assets under management. The reason for setting this threshold is twofold: first, we are aware that a number of investors and advisers will not consider funds below a certain minimum size; and second, by definition, smaller funds have the potential to outperform at a level which cannot be replicated as assets under management grow. In our database we split funds into small, medium and large categories, and can set any threshold for exclusion.