Objective and Strategy
The Fund seeks total return through growth of capital and current income. There can be no assurance that the Fund will achieve its investment objective.
The Fund seeks to achieve its investment objective by investing primarily in real estate investment trusts (“REITs”) and other related securities (as further described below) issued by U.S. real estate companies. The Fund defines a real estate company to be any company listed or traded on a Recognised Market that (i) derives at least 50% of their revenues from the ownership, operation, development, construction, financing, management or sale of commercial, industrial or residential real estate and similar activities, or (ii) invests at least 50% of their assets in such real estate. Securities in which the Fund may invest include common equity shares and preferred equity shares of real estate companies, and also units of beneficial interest in real estate companies, such as REITs or Real Estate Operating Companies. The Fund may also invest up to 20% of its net assets in fixed income securities, including high yield securities, listed or traded on a Recognised Market. The Investment Manager and Sub-Investment Manager utilize a fundamental, bottom-up, value-based selection methodology, taking into account short-term considerations, such as temporary market mispricing, and long-term considerations, such as values of assets and cash flows. They take a balanced approach to investing, seeking to mitigate risk through diversification, credit analysis, economic analysis and review of sector and industry trends. The Investment Manager and Sub-Investment Manager use proprietary research to select individual securities that they believe can add value from income and/or the potential for capital appreciation. The proprietary research may include an assessment of a company's general financial condition, its competitive positioning and management strength, as well as industry characteristics. They may sell a security held by the Fund that becomes overvalued or no longer offers an attractive risk/reward profile. A security may also be sold due to changes in portfolio strategy or cash flow needs.
Real Estate Investment Trusts (REITs)
It is expected that a significant portion of the Fund may be invested in REITs listed or traded on a Recognised Market. REITs are companies that own interests in real estate or in real estate related loans or other interests, and their revenue primarily consists of rent derived from owned, income producing real estate properties and capital gains from the sale of such properties. A REIT in the U.S. is generally not taxed on income distributed to shareholders so long as it meets tax related requirements, including the requirement that it distribute substantially all of its taxable income to its shareholders. The Fund retains the ability to invest in real estate companies of any size market capitalization. The Fund does not invest in real estate directly.
Why Invest in the Brookfield U.S. Listed Real Estate UCITS Fund
An Opportunity to capitalize on the Income and growth potential of U.S. Real Estate Markets
The Manager believes that real estate securities offer a compelling way to access the income and growth potential of U.S. real estate markets, while relying on the liquidity, transparency and corporate governance found in publicly traded securities markets.
A Fund with Income and Growth Potential
REITs invest in commercial real estate, which comprises tangible assets such as land and buildings. Accordingly, their values tend to increase over time as replacement costs and rents rise, which can provide capital appreciation potential. Real estate companies with a REIT structure also tend to have dividend yields that are higher than stocks with similar risk profiles, since they are required to pay out a minimum of 90% of taxable income to shareholders.
A Tool for Enhancing Portfolio Diversification Potential
Since the performance of real estate securities is tied to the cash flows generated by commercial real estate properties, the securities that own these properties may perform differently from other asset classes. For this reason, an allocation to real estate securities may offer complementary diversification potential to a traditional portfolio concentrated in stocks and bonds.
A Distinctive Management Team with Specialized Expertise
The investment team of experienced analysts and portfolio managements employ a bottom-up, value-driven and fundamentally based process to identify the Fund’s holdings, which are diversified by property type and geography across U.S. markets.