Joshua Varghese, portfolio manager at Signature Global Asset Management at CI Investments
Focus: REITs

MARKET OUTLOOK

Appetite for REITs has been reinvigorated due to the market’s assessment of a lower growth, lower yield environment evidenced by 10-year bond yields declining globally. There appears to be a rotation out of higher-growth sectors into companies with visible cash flow profiles like REITs. REITs have recently proven to be doing their job in balanced portfolios, as they’ve provided solid diversification to equities. The S&P 500 peaked in September 2018 and sold off hard through the last quarter of the year. While that index was down almost 20 per cent to its trough in December, U.S. REITs declined by half that amount and Canadian REITs fared even less badly, down approximately 6 per cent. Year-to-date the REIT market and particularly the North American REIT market has been very strong, up over 15 per cent. REITs appear to be fairly valued, however we believe the strength can continue as capital rotation causes flows to continue to move towards the sector.

TOP PICKS

TRICON CAPITAL (TCN.TO)

CUSHMAN & WAKEFIELD (CWK.N)

DREAM OFFICE REIT (D_u.TO)

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
TCN N N Y
D-U N N Y
CWK N N Y

 

PAST PICKS: DEC. 5, 2018

ALEXANDRIA REAL ESTATE EQUITIES (ARE.N)

  • Then: $123.54
  • Now: $141.36
  • Return: 14%
  • Total return: 16%

INVITATION HOMES (INVH.N)

  • Then: $21.24
  • Now: $24.11
  • Return: 14%
  • Total return: 14%

TRICON CAPITAL (TCN.TO)

  • Then: $10.17
  • Now: $11.49
  • Return: 13%
  • Total return: 14%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ARE N N Y
INVH N N Y
TCN N N Y

 

Total return average: 15%

WEBSITE: https://ci.com/en/portfolio/signature