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Timbercreek U.S. REIT Preferred Fund

Manager Commentary



The Timbercreek U.S. REIT Preferred Fund is pleased to provide you with a quarterly update which highlights the Fund's performance, portfolio changes and includes a quarterly market commentary from the Portfolio Manager.

Q1 2017 – Market Commentary Highlights

  • Global economic data continued to improve in Q1. and U.S. economic indicators strengthened prompting the Fed to raise rates another 25 bps 
  • REIT preferred shares performed well during Q1, showing that the asset class can deliver positive returns in a rising rate environment 
  • The Fund generated a +3.7% total return on a net basis
  • During the quarter the Fund exited positions with higher call risk to reinvest in preferred shares with lower call risk, strong valuations and high yield to calls without sacrificing current yield
  • Rising REIT cash flows should improve coverage ratios throughout the year, making REIT preferred coupon payments more attractive on a risk-adjusted basis

We believe the underperformance of U.S. REIT preferred shares in 2016, combined with the fact that many issues are now trading at discounts, should set the stage for better returns in 2017.

For further commentary, please click on the link below.

Quarterly Manager Commentary