The FTSE/JSE Listed Property Total Return Index was flat at 0.32% in September and up 3.18% from the Fund's inception date. The index gained 7.75% year to date, but the listed property market has been directionless lately, largely because of the expected interest rates hike over the next two Monetary Policy Meetings. Meago expects 50 basis point rate hikes in October and in December, bringing the total rate hikes for the year to 200 basis points.
The fund performance was negatively affected by Ambit, Premuim (which are very volatile), Freestone, Emira, Growthpoint (which went ex dividend) and Vukile. CBS, ApexHi B, Sycom and Octodec were marginally positive for the month.

The property sector fundamentals are still positive with most counters reporting reduced vacancies, increased turnovers because of rental increases across the retail, industrial and commercial sectors, lower financing costs because of securitization and aggressive lending margins by the banks. The forward yield on listed property is 8.5% which is still better than cash and bonds.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.