Real Estate
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Real Estate Strategy Global Real Estate Trust |
Overview
Research by financial economists demonstrates that listed property is a separate asset class distinct from equity assets. Investors are able to diversify their portfolios by including an allocation to property. Global listed property extends this diversification principle. Being able to invest across many countries enables investors to benefit from the low correlation between property markets in each country. DFA Australia's Global Real Estate strategy provides investors with efficient access to global listed property and its diversification benefits.
Global Real Estate Strategy
The strategy invests primarily in the listed securities of real estate investment trusts (REITs) and REIT-like entities. These structures pool investor funds to provide access to returns from income-producing real estate and provide a transparent tax treatment for investors.
Dimensional's Investment Committee determines which countries are eligible for the strategy. In line with the preferences of many Australian investors, the allocation to Australia, at approximately three times its natural weighting, is significantly greater than if the country were weighted according to market capitalisation. The weighting for other countries and for individual securities within those countries is based on market capitalisation, but adjusted to manage exposure to foreign investment fund (FIF) tax liability.
Tax Management
For the Global Real Estate strategy, DFA Australia seeks to maximise the after-tax value of an investment by managing the Trust in a manner that aims to defer the realisation of net capital gains where possible and to manage dividend income.