As a result, the manager’s Asian real estate income fund is maintaining a high exposure to Japan.
At 35% weighting, Japan is the largest single country position, chiefly on relative value grounds.
The fund provides exposure to 20 high dividend paying Asian real estate stocks (mainly REITS).
The fund’s second-largest single country position is now Hong Kong, accounting for 30% of the portfolio.
The weighting doubled after the manager slashed holdings in Australia, which now comprises 15% of the portfolio, down from 30%.
Barclays Capital said as with the fund’s position in Japan, the allocation to Hong Kong partly reflects the territory’s attractive property investment yields relative to government bonds.
“Japan could offer an interesting opportunity as a potential value play given that the market has good levels of occupancy and strong yields compared with 10-year government bond yields,” said Nathan Bance, director in UK investor solutions at Barclays Capital. “The IPD yield is 5.2% with some of the Japanese REITs we hold yielding in excess of that. If REIT yields remain as attractive as they currently are, we believe the Fund could continue to perform well in the months ahead.”
The fund recently marked its fifth anniversary. Since launch in June 2006, it has consistently delivered in excess of its 9% annual target yield and in capital terms has returned 16.08%.
