By guest contributor Atchison Consultants
REVIEW
The AREIT market, as measured by the S&P/ ASX 200 AREIT Accumulation Index, gave a total return of 10.0% for the quarter ending 30 June 2018. AREIT prices have benefited from declining bond yields over the quarter.
Over a rolling 12-month period to June 2018, AREIT returns have risen to the top of asset class returns. AREITs delivered an outstanding total return of 13.2%, closing the performance gap with the broader S&P/ ASX 200 Accumulation Index which returned 13% over the same period.
Performance
Table 1 below shows the performance of the AREIT market, including total return and volatility of returns (standard deviation), for the period ending 30 June 2018.
Table 1: AREITs – Total Return Performance to 30 June 2018
AREITs returned 9.8% in the June quarter after recording a -6.4% return in the March quarter. The strength in the AREIT market coincided with rising concerns of an escalation in a trade war between US and China, political tensions in Europe, a pullback in US bond yields and the flattening of the US and Australian yield curves.
Total returns over 12 months, 3 years and 5 years for the June quarter were 13.2%, 9.7% and 12.0% respectively. Although the AREIT market fluctuated sharply in the short-term, total returns were broadly stable across longer periods.