The cash was finally invested in listed property shares in mid-April, by the managers, Fidelity Investments in Boston, USA. The fund is now invested in 76 listed property shares in 13 different countries, with by far the biggest holding in the US (50%-plus), in line with the benchmark index (Epra/Nariet). Relative to the benchmark, the fund is overweight the UK (by 1.6%), the US (by 1.5%), Greece (by 0.8%), the Netherlands (by 0.6%), Australia (by 0.5%), France (0.3%) and Singapore (by 0.2%). Underweight positions are in Sweden (1.2%), Austria (0.7%), Germany (0.5%) and a few other small underweights. The fund's biggest holdings across the countries is in the retail sector of the commercial property market (30% of fund), meaning shopping centres, followed by office blocks (25% of fund), diversified (18%), which refers to shares that hold a spread of retail, office, industrial etc. Residential rental property (apartment complexes) comprises 13% of the fund, industrial property 9% and finally hotels 5%. So the fund is extremely diversified in rental property on a global basis, most of which is commercial property (87% of fund), which is not considered to be in anywhere near overvalued or in "bubble" territory (as compared with normal residential housing in many countries). Also, although the US, Australia and the UK commercial property markets are strong, the European markets are quite weak and the Japanese market is coming off such a low base after falling 80% in value during the 1989-2003 debacle in Japan. So once again, the cycles differ, implying even more diversification. In the past 10 years, listed global property has delivered an average annual return of 11.3% in dollars, exceeding the return of global equities (7%) and global bonds (5.7%). In the next 5 or 10 years, Fidelity expect the return to be closer to 7-9% per year, which is the approximate return that an investor would get (net) from buying a building in most of these countries. The fund's unit price may be affected in the short-term if global bond yields rise materially, something which has not happened for many years and which is not expected to happen in the foreseeable future because inflation remains low wordwide. However, if bond yields do rise and hurt listed property prices, this would be offset to some extent by the rising dividends expected from the property funds (in an economic upswing).

The STANLIB International Property Fund is an international property portfolio aiming to provide a reasonably high current yield and long-term capital growth. The portfolio is positioned according to the FTSE EPRA/NAREIT Global Real Estate Index and any over/underweighting is a result of bottom-up stock selection by the investment manager.

The Manager of the fund requires minimum capital investment of US$3 million (R18 million) in order to invest the fund on a well-diversified global basis. This requirement has been met and the fund was fully invested by 18 April 2005 (Fund size of R32 million at 29 April 2005). The STANLIB International Property Fund up to 18 April 2005 was invested in US Dollar cash, which has been rather fortuitous for investors as the US Dollar has been the best performing currency in the world since the beginning of the year. The FTSE EPRA/NAREIT Global Real Estate Index has been quite volatile - falling 6% in US Dollar terms and then recovering such that it is 2.00% down since 1 January 2005. This pullback in the index was somewhat expected, following its sharp rise in 2004. Similarly, the domestic property market has fallen by 3% since it peaked in March after its phenomenal run over the last few years.

Property as an asset class remains an important part of any strategic asset allocation as diversification reduces risk and smoothes portfolio performance. The fundamentals for international property going forward remain strong.