Download GLOBAL INVESTORS Principal Global Property Securities Fund

PRODUCT PROFILE
RESEARCH
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RESOURCES
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R E S U LT S
PRINCIPAL GLOBAL INVESTORS
Principal Global Property Securities Fund
Principal Global
Property Securities Fund
The Principal Global Property Securities Fund
(the Fund) invests primarily in a range of
global property securities.
The Fund is designed for Australian investors
seeking exposure to a diversified portfolio of
global property securities with the potential for
capital growth over the medium to long term.
Investments denominated in foreign currencies
are hedged into Australian dollars.
Fund Characteristics
Turnover
• Typically 50% to 100%
Size/Number of Positions
• Targeted number of holdings: 75-125
• On average the Fund will hold between
85-95 securities
Performance Benchmark
• FTSE EPRA/NAREIT Developed Index
(hedged to Australian dollars)
General Investment Guidelines (relative to the
benchmark)
• Regions: ± 5.0%
• Property Sector: ± 15.0%
• Individual Stock Weights: ± 5.0%
• Expected Tracking Error: <5.0%
Cash and Short-term Debt Securities
• Up to 25%
Why Global Property Securities with Principal Real Estate Investors?
Principal Real Estate Investors is the dedicated real estate asset management group of Principal Global Investors. Our real
estate capabilities span the spectrum of public and private equity and debt investment alternatives. We have been successfully
managing real estate securities since 1998, and have built a reputation for delivering consistent excess returns, over the long
term, primarily through bottom-up security selection.
Experienced, dedicated team: Our global real estate securities team consists of 14 investment professionals with an average of
14 years experience. They use their specialized knowledge of regional real estate markets to exploit inefficiencies and generate
alpha. That knowledge and experience has helped the team build a proven track record of generating consistent excess returns.
Consistent and differentiated process: Our investment process integrates both fundamental and quantitative research. We
believe the integration of these two independent, but complementary, approaches to securities analysis provides a more robust
signal of a stock’s performance potential, and distinguishes our approach from that of other managers. Our fundamental
research relies on the professional judgment of our experienced portfolio managers and analysts to provide deep forward-looking
perspectives, while our quantitative research provides systematic analysis in an objective, unemotional and repeatable fashion.
Our research process, combined with the depth of knowledge and market insight of our property sector specialists, enables us to
consistently identify relatively mispriced securities in a variety of market environments.
Leveraging cross-asset insights of firm wide resources: The focused experience of the team, and their ability to add value for
the Fund, is enhanced by the team’s ability to leverage the broader real estate insights of Principal Real Estate Investors, as well as
the global securities intelligence of the Principal Global Equities team. In addition to the cross-asset class sharing of insights, the
teams often share research technology, including the Global Research Platform, our proprietary quantitative research tool used
by the global real estate securities team and Principal Global Equities.
Award winning expertize: The Global Real Estate Securities Fund-I Class, a U.S. Mutual Fund advised by Principal
Real Estate Investors, recently received an award in the U.S. from Lipper Inc for Best Global Real Estate Fund Over
a 5-Year Period Award, for the second year in a row.1
OUR PORTFOLIO MANAGERS HAVE SPECIALIZED KNOWLEDGE OF REGIONAL REAL ESTATE MARKETS, WHICH—
BECAUSE REAL ESTATE IS A HIGHLY LOCALIZED BUSINESS AND MARKETS ARE OFTEN INEFFICIENT—PROVIDES
THE POTENTIAL TO EXPLOIT INEFFICIENCIES AND GENERATE ALPHA.
WHY GLOBAL PROPERTY SECURITIES?
Liquidity
Where the Fund Invests
Global property securities (which are publicly
traded) provide investors of all sizes with access
to global real estate markets at lower transaction
costs than direct real estate investment/
ownership. Publicly traded real estate securities
offer daily pricing, which provides liquidity not
typically available from other forms of real estate
investment.
• A REIT is established as a trust or partnership structure and uses the pooled capital of many investors to purchase and manage
income real estate and/or mortgage loans. They are granted special tax exemptions, not being taxed at the company level,
but they must distribute at least 90% of their taxable income to investors. 2
• REOCs also invest in income property and/or mortgages and loans but are structured as companies and are taxed like any
other corporation and have no mandatory dividend distribution requirements.
Diversification benefits
Global property securities provide diversification
benefits to an investor’s overall portfolio because
of their low correlation with the global bonds and
equity markets, as well as diversification within
the real estate component of their portfolio due
to the low correlation among geographic regions.
Regular income
The Fund invests predominantly (not less than 80% of its assets) in real estate investment trusts (REITs) or real estate operating
companies (REOCs) in the United States, and REOC or REIT-like structures in other areas of the world. Both REITs and REOCs are
tradable on major markets and exchanges as securities.
Security selection begins at the local market level, with analysts making recommendations on assigned securities to the relevant
regional portfolio management team, who jointly consider and determine if a stock deserves to be included in the portfolio. We
have a total return focus characterized by identifying high quality companies trading at attractive prices. The stocks receiving
the highest conviction designation are given the highest level of active weighting within the portfolio, as they represent our best
ideas.
Principal Global Investors
Principal Global Investors, the advisor to the Global Property Securities Fund, is a diversified asset management organization.
Principal Real Estate Investors employ more than 200 real estate investment professionals, including a specialized team of 14
responsible for directing and managing our global real estate securities strategies.
The US Lipper Fund Award was for best risk-adjusted performance over the five-year period to 31 December 2013.Lipper
Inc. is a Thomson Reuters company. The Global Real Estate Securities Fund is only available in the US, and details in relation
to it are provided only to demonstrate the investment expertize of the investment adviser.
1
While real estate investments are not immune
to recessions, they can continue to provide
cash flows in economic downturns. Real estate
investments, supported by lease contracts
(generally three to 10 years in duration,
depending on the property type) can provide
a steady income stream from tenants even in
economic downturns.
Inflation hedge
Real estate assets perform well as an inflation
hedge because the investment comprises physical
as opposed to monetary assets, which lose
value as inflation rises. Also, real estate sectors
such as office, industrial and retail typically
have lease contracts that stipulate how rents
are automatically adjusted to compensate for
inflation.
Principal Global Investors (Australia) Limited ABN 45 102 488 068 AFSL No. 225385 (PGIA) is the issuer and responsible
entity of the Fund. Unless you are a wholesale client you cannot invest directly into the Fund. Other investors may access the
Fund through an IDPS or similar service. A copy of the relevant Product Disclosure Statement (PDS) is available at HYPERLINK
http://www.principalglobal.com/au/index.aspx http://www.principalglobal.com/au/index.aspx or from your IDPS operator.
You should consider the PDS in deciding whether to acquire, or continue to hold units in the Fund.
The information in this document is general only and is not intended to constitute professional advice or a recommendation
to purchase, sell or hold any particular security. It does not take into account your particular investment objectives, financial
situation, or needs. You should consider whether an investment in the Fund is appropriate for you in the light of your
objectives, financial situations or needs. The information is given in good faith and has been derived from sources believed
to be accurate as at the time of inclusion. However, neither PGIA nor any company in the Principal Financial Group gives
any representation as to, or warranty of reliability or accuracy nor accepts any responsibility arising in any way including by
reason of negligence for errors in or omissions from this document.
Neither PGIA nor any company in the Principal Financial Group promises that you will earn any return on any investment
or that an investment will gain or retain its value. An investment does not represent deposits in or other liabilities of the
manager the Principal Financial Group or any member of the Principal Financial Group. An investment is subject to risks,
including possible delays in repayment and loss of income and principal invested. The Principal Financial Group does not in
any way guarantee the capital value and/or performance of the Fund. Returns are historical and do not take into account
tax and are not adjusted for inflation.
Principal Global Investors is the asset management arm of the Principal Financial Group ® (The Principal ®)¹ and includes
the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real
Estate Investors, LLC; Principal Enterprise Capital, LLC; Liongate Capital Management LLP; Spectrum Asset Management,
Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, Inc.;
Morley Financial Services Inc.; Finisterre Capital, LLP; Origin Asset Management, LLP; Principal
Principal Financial Group
Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global
Investors (Australia) Ltd.; Principal Global Investors (Japan) Ltd.; Principal Global Investors
(Hong Kong) Ltd.; CIMB-Principal Islamic Asset Management Sdn. Bhd.; and the majority
owned affiliates of Principal International, Inc. Assets under management includes assets
managed by investment professionals of Principal Global Investors under dual employee
arrangements with other subsidiaries of The Principal and assets managed in accordance with
investment advice provided by Principal Global Investors through the delivery of a model.
Contact Us
Principal Global Investors (Australia) Limited
(02) 8226 9000
Head of Client Relationship and Marketing
Helen de Mestre
[email protected]
Director, Head of the Third Party Sales
Giles Gunesekera
[email protected]
Director, Institutional Sales
Cameron Sinclair
[email protected]
1 ”The Principal Financial Group” and “The Principal” are registered trademarks of Principal
Financial Services, Inc., a member of the Principal Financial Group.
2 The actual percentage that must be distributed to investors to qualify for the special tax
exemption varies by country.
Pensions & Investments, “The Best Places to Work in Money Management,” 12/08/2014.
WWW.PRINCIPALGLOBAL.COM/AU