Real estate predictions, looking for growth, and the uncomfortable truth

Genuine Impact
Jun 10 · 3 min read
Alister Sneddon, CTO

Here are the top 3 insights for June 10th, prepared by Alister, our CTO.

Today’s Brief

  • Deloitte: Real Estate Predictions 2019 — Prepare to adapt to the changing market
  • Invesco: Looking for clues on growth
  • KKR: The Uncomfortable Truth
  • The global real estate and construction market has been changing over the past few years.
  • The Real Estate team from Deloitte Netherlands has developed Real Estate Predictions 2019 which looks at global industry trends.
  • The report includes a series of articles about issues including blockchain, circularity, and cybersecurity.

Genuine Scores for the top 3 Equity Real Estate Investment Trusts (REITs) stocks

  • Stockland Corporation, 64
  • Park Hotels & Resorts, 64
  • Uniti Group, 62
  • In the past several months, we have seen central banks make an abrupt turn toward a more dovish monetary policy stance.
  • The initial assumption by markets was that this was a decisive turn.
  • However, more recent communications suggest otherwise.
  • As doubts about economic growth continue to grow, so does uncertainty about the path of policy.
  • For example, the release of the March Federal Open Market Committee (FOMC) meeting minutes several weeks ago indicated that the next move by the Federal Reserve (Fed) was equally likely to be a hike or a cut.
  • Recent comments from FOMC members have reinforced the notion that the Fed doesn’t know whether its next move will be up or down — but it’s comfortable sitting in a holding pattern for the time being.

Genuine Scores for top 3 US focused Bond funds

  • PGIM Core Short-Term Bond Fund, 100
  • iShares Ultra Short-Term Bond ETF, 100
  • Invesco Ultra Short Duration ETF, 100
  • As the intensifying yearn for yield by investors increasingly bumps up against “the uncomfortable truth” of declining interest rates amidst soaring fiscal deficits and bulging debt loads, KKR’s Global Macro, Balance Sheet, and Risk Analytics team has analyzed what yield-oriented investors, especially those with large swaths of exposure to Fixed Income and Real Assets, can do to outperform without taking on undue risks in this environment.
  • Our suggestion is to own more cash flowing assets linked to nominal GDP, build more flexibility across mandates, and shorten duration where appropriate.
  • Importantly, despite our view that inflation will remain low in the medium-term, we respect that the ‘Authorities’ are trying shrink existing debt loads by holding nominal interest rates below nominal GDP.
  • As such, we believe strongly that an overweight to modestly leveraged Infrastructure and certain Real Estate investments with yield is prudent to add some ballast to one’s portfolio.

Genuine Scores for the top 3 Globally focused funds

  • PIMCO Short Asset Investment Fund, 100
  • Pioneer Multi-Asset Ultrashort Income Fund, 99
  • SPF Securitized Products, 99

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All the best, Alister and the Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 23rd of April

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