Key Facts and Summary of the Report:
Report Title: UOB APAC Green REIT ETF Annual Report
Reporting Period: Financial year ended June 30, 2024
Date of the Report: September 20, 2024
1. Fund Performance:
- The fund had a negative performance for the year, with the UOB APAC Green REIT ETF declining by 6.8% compared to the underlying index, which dropped by 5.78%.
- Notable contributors to performance: Scentre Group (Australia), Stockland (Australia), Capitaland Integrated Commercial Trust (Singapore).
- Detractors: Mapletree Logistics Trust (Singapore), GLP J-REIT (Japan), and Frasers Logistics & Commercial Trust (Singapore).
2. Dividend Distribution:
- The fund targets a 4% dividend yield per annum, distributed on a semi-annual basis.
- For 2024, two notable dividends were:
- March 2024: 1.436 SGD per 100 units.
- December 2023: 1.511 SGD per 100 units.
3. Market & Economic Outlook:
- The report highlights volatility in Asian equities, driven by China’s uncertain economic growth. However, optimism about artificial intelligence (AI) positively affected global markets.
- Looking forward, Global REITs are expected to stabilize as interest rates settle. The report predicts resilience in REIT earnings despite the challenges of economic slowdown, rising interest rates, and regulatory changes.
4. Special Activities for Profitability:
- The fund managers intend to rebalance the portfolio semi-annually in March and September. The last rebalancing occurred in March 2024, and the strategy focuses on identifying REITs with sustainable growth and strong cash flow.
- The fund also tracks environmental sustainability metrics through the Green Impact Dashboard. It shows improvements in areas like greenhouse gas emissions, water conservation, and energy consumption.
5. Geographic Allocation:
- As of June 30, 2024, the fund’s investments were primarily in Australia (39.37%), Japan (31.02%), and Singapore (23.52%).
Recommendations for Investors:
- If You Hold the Stock:
- Hold or accumulate: If you are already invested, consider holding or accumulating more units as REIT earnings are expected to be resilient, and the fund offers a stable dividend yield. The focus on green investments also provides long-term sustainability appeal.
- Be mindful of the volatility in Asian markets, particularly due to China’s economic performance.
- If You Do Not Hold the Stock:
- Buy cautiously: If you do not yet hold this ETF, it could be a good investment for those seeking exposure to green REITs with a focus on Asia-Pacific, especially with the dividend yield target of 4%. However, consider the current market volatility and the potential impact of economic uncertainty.
Special Investor Considerations:
- ESG Focus: The fund prioritizes investments in REITs with strong environmental sustainability metrics, which could be appealing for investors focusing on sustainable investments.
- Dividend Stability: The 4% dividend yield makes it attractive for income-seeking investors.
Disclaimer:
The above recommendations are based solely on the information provided in the fund’s annual report. Please consult with a financial advisor to consider your personal financial situation before making any investment decisions.
