Al Salam Bank-Bahrain, a pioneering shari’a-compliant bank in the kingdom, has announced that its ASB Global REIT (real estate investment trust) Fund achieved a record 25.75 per cent total return for the year ended December 31, 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 mainly comprises US REITs, in addition to REITs with focused mandates in Australia, the UK, Hong Kong, Japan, Singapore and Malaysia, said the statement from ASBB. 

 

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, it stated.

 

The ASB Global REIT Fund has consistently ranked amongst the best performing global REIT funds, ranking first (for the period since 2017) and third (Year to April) out of a comparable set of funds.

 

ASBB Head of Treasury & Capital Markets Hussain Abdulhaq said: "The 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," stated Abdulhaq, who is also a director of the Fund.

 

According to him, 2019 has been a record year for the ASB Global REIT 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," he added.

 

Christian Bernasconi, the co-founder of B&I Capital and the asset manager of the Fund, said: "It had 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," stated Bernasconi.

 

“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,” he added.-TradeArabia News Service