MANAMA: Al Salam Bank-Bahrain, the pioneering Shari’a-compliant Bank in the Kingdom, announced that its ASB Global REIT Fund achieved a record 25.75 percent total return for the year ended 31 December 2019.
Launched in 2014 as one of the first Shari’a compliant REIT Funds and converted to a global mandate in 2017, the ASB Global REIT Fund has holdings in REITs listed on stock exchanges globally with exposures to various sub-sectors of real estate. The current portfolio is mainly comprised of US REITs, in addition to REITs with focused mandates in Australia, the UK, Hong Kong, Japan, Singapore and Malaysia. Historically, REITs have comparatively outperformed equity indices; US REITs, for example, recorded a 10.7% 30-year compounded annual total return compared to 10.0% by the S&P500.
The ASB Global REIT Fund has consistently ranked amongst the best performing global REIT funds, ranking 1st (for the period since 2017) and 3rd (Year to April 2020) out of a comparable set of funds.
“The ASB Global REIT Fund offers individual and institutional investors a unique opportunity to invest in a Shari’a-compliant product that provides exposure to multiple real estate sub-sectors across geographies without the hassle of owning direct real estate. The Fund is highly liquid offering investors the ability to subscribe and redeem on a weekly basis. Yielding in nature, the Fund has paid quarterly dividends since its inception in 2014,” Hussain Abdulhaq, Al Salam Bank-Bahrain Head of Treasury and Capital Markets, said.
“The 2019 has been a record year for the Fund, achieving a total return of 25.75%. With a balanced sectorial allocation that excludes hospitality, one of the most impacted sub-sectors of real estate, the Shari’a-compliant investment criteria is expected to aid in cushioning the impact of the current COVID-19 pandemic on the Fund,” Abdulhaq, who is also a director of the Fund, added.
“The Fund has a concentration in growth sectors that are anticipated to offer better risk-adjusted returns relative to the more traditional sectors of real estate which are currently facing disruption. Over 23% of the Fund is invested in data centers and cell towers to capitalize on the expected growth from 5G rollout in the US and greater cloud adoption by enterprises. The Fund is also exposed to logistics REITs, at approximately 17%, benefitting immensely from the uptake in global demand for logistics space driven by e-commerce and retailers looking for greater operational efficiency,” Christian Bernasconi, the co-founder of B&I Capital and the asset manager of the ASB Global REIT Fund, said.
“These sectors are currently witnessing secular growth and are inherently defensive in nature. The high growth concentration, combined with low leverage, strongly positions the Fund for a sustainable future,” Bernasconi, added.
