With many Australian stock market investors already in the local property market via their mortgage, Quay Global Investors principal and portfolio manager Chris Bedingfield believes that these investors are probably ‘doubling up’ on their Australian real estate exposure. After all, it is pretty difficult for them to get access to assets that are not perfectly correlated with domestic equities.
“Real estate is a great way to protect yourself from inflation and to preserve capital—if you buy it at the right price,” Bedingfield said.
He also said that those investors with portfolios being dominated by domestic equities and Aussie real estate should consider diversifying into global listed real estate.
“It may feel counterintuitive, but if you actually had a piece of Australian real estate in a global real estate fund, you’ve probably got more diversification than if you’ve just got Australian equities,” Bedingfield said. “For example, for the fund and the global real estate unhedged index, the correlation to the Australian share market is almost zero. So it’s a real diversification play.”
Quay Global Investors, founded in 2013, currently has a fund of around $5 million under management. Bedingfield expressed his desire to grow the fund to $50 million by the end of the year.
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