And the Global Property winner is...
1-year return: 20.4%
3-year return: 33.8%
Fidelity Global Property makes its inaugural appearance in our awards for 2019, lifting the Best Global Property Shares fund crown thanks to a consistently strong performance that puts it in the first quartile over most time periods. It has achieved this while taking less risk than many of its peers. A Rated Fund since 2017, it invests in the shares of property companies globally rather than directly in bricks and mortar.
Launched in 2006, it has been run since 2013 by Dirk Philippa, who is experienced in property equities. This is his first portfolio management role, but two pilot periods at Fidelity yielded strong results.
The fund’s performance has improved markedly under his leadership, owing largely to his decision to give it a more concentrated portfolio of 30 to 40 shares and put greater emphasis on larger companies with good dividend yields. The fund’s yield is modest at 1.7%, paying income half-yearly.
When choosing where to invest around the world and in which sectors, his main focus is on stockpicking. He overlays this with consideration of prevailing macroeconomic factors to determine the balance between the two types of companies he looks for: dynamic value (50-70% of the portfolio) and quality compounders (30-50%).
His core philosophy is to invest in property securities that are trading on attractive valuations. He looks for valuation anomalies in companies relative to their own history, to peers or versus other regions. These are often property securities that have been through a period of underperformance, where little value is ascribed to their recovery potential and therefore there is strong relative upside potential.
Quality compounders represent quality at a reasonable price. These are companies that he believes can achieve superior growth due to good capital allocation decisions made by experienced management teams. They can sustain growth longer than the market estimates, and generate superior shareholder returns. The fund’s largest country weighting is to the US, at more than 50% of its £245 million of assets.
Investing in attractively valued securities sees upside