
Ordinary Shares

Price (p)	144.50
Published NAV	166.80
Yield	4.22
Discount	-12.88

Prices correct as of close 2012-05-18. Last Published NAV is as at the previous business day. Source: Trustnet

Sigma Shares

Price (p)	63.50
Published NAV	85.80
Yield	1.97
Discount	-25.29

Prices correct as of close 2012-05-18. Last Published NAV is as at the previous business day. Source: Trustnet

For Ordinary Shares

March 2012
March was another positive month for listed real estate company share prices with the EPRA Europe Index (TR, in GBP) +4.06% in the month. Investors warmed not only to broadly positive news flow from property companies reporting full year results, but also from a more optimistic response from Europe's political leaders and central bankers culminating in a further strengthening of the fiscal bailout system to €700bn. However, the severity of the structural reforms required across the eurozone are underestimated at one's peril. Spain remains in a difficult place announcing further austerity cuts of €27bn in the 2012 budget. Further falls in house prices and rising unemployment figures (particular in the 18-34 yrs) points to further quarters in recession. Whilst the Fund has no direct exposure to Spanish property companies, a large number of property companies have pan-European portfolios particularly in the retail space. We monitor all our country exposures very carefully and minimising that particular country exposure is vital. On the other hand, Italy saw returns of 11% and 12% respectively from Beni Stabili and IGD as the cost of Italian sovereign debt tumbled from 7% to 5%. We maintain our long position in Italy.
The Ordinary share class NAV with income increased by 5.1% in March and brings the financial year-end figure to -8.5%. This compares to 4.1% for the benchmark in the month and -8.9% for the year, slight outperformance in both cases. The gearing remains at 9.1% but the property assets are 11.5% of the net assets. The property portfolio rose in value by 2.1% in the six month revaluation at the end of March and thus contributed to the 1% outperformance in the month.
At the country level, alongside Italy, Germany was the other strong performer (+9.5%) as investors became more comfortable with the eurozone's issues and bought both the most likely beneficiary and the most bombed out parts of our universe. Traditional safe havens such as Belgium and Switzerland underperformed. We however continue to have concerns about over optimism particularly towards the European consumer. The Fund positioning remains focused on high quality companies with strong balance sheets. We continue to expect buying opportunities from the deleveraging cycle for those businesses with firepower. Unibail's raising of €750m through a 7 year bond at a yield of 3% (105 bps spread) in mid March is illustrative of the attractive cost of capital for those who can access it.