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AREITs Portfolio

FIM’s AREIT portfolio has pure property characteristics, deriving a high proportion of income from property rental income. The portfolio will have minimal exposure to development, currency risk and other 'active' earnings. The pure property strategy is intended to be a concentrated portfolio with a relatively low turnover. The investment characteristics of AREITs suitable for this strategy include:

  • Property rental income > 90% of
    total income
  • Domestic assets > 30% of total assets
The domestic assets constraint is intended to screen out the stocks that are wholly located offshore, and which are better managed by managers local to the assets, not Australian based companies.

The portfolio is managed against the rolling three year return of a subset of the S&P/ASX 300 Property Accumulation Index, filtered by the constraints described above, plus a cap on Westfield Group at 10%.

When measured against the broader index, this may result in a high tracking error but with volatility approximately in line with the broader benchmark. Tracking error measures how closely the portfolio follows the index against which it is benchmarked.