US Real Estate Securities

Investment Objective:

To provide clients with an excess return of 200-400 basis points over the FTSE/NAREIT All Equity REITs Index.

The Invesco Edge:

  • Quantitative tools provide rigor in targeting specified returns and risks
  • Generally more securities in the portfolio versus competitors, and less stock-specific risk
  • Active investment decisions are made on healthcare, specialty, self-storage and hotels. Other managers may arbitrarily exclude these areas
  • Liquidity and day-trading volume is integral in risk assessment and control. Illiquidity risks are not fully appreciated by traditional standard deviation and beta statistics
  • Bullet added here

Investment Strategy:

Our objective in real estate securities investment management is to achieve a higher-than-market return with average market risk over the long-term. We compare current equity valuation levels relative to long-term norms, the value of the underlying real estate assets, and management’s proven ability to produce favorable returns in the construction of our clients’ portfolios.

There are approximately 250 companies in the universe of equity real estate securities. We focus on approximately 150 companies that meet minimum capitalization criterion and capture the characteristics of the relevant benchmark. Relative to the FTSE/NAREIT Equity Index, Invesco’s portfolios are generally distinguished by the following characteristics:

  • Higher, more consistent earnings
  • Better dividend coverage
  • Lower leverage
  • Larger market capitalizations
  • Better liquidity
  • Average market risk

Invesco maintains well-diversified portfolios with exposure to major sectors of the market, although our stock selection and fundamental research may lead us to overweight or underweight particular regions or property types. Invesco focuses on larger, better quality companies that are expected to provide attractive risk-adjusted returns.