The Quay Global Real Estate Fund fell slightly by -0.37% in September, but broadly in line with the Global Equity Index which fell -0.33%. The fund was also assisted by currency gains, reversing the recent trend. Across the underlying portfolio the self-storage sector continued to provide rewards from its holdings in CubeSmart, Shurgard and Life Storage.

The manager noted some frustration with the imbalanced performance of the Global Real Estate sector vs. the stellar performance of global equities, particularly the local and US tech sector: 'Since the market peaked in late February, the S&P 500 consensus 2020 EPS has declined -23%, while US REITs earnings are down 10%. However, the S&P 500 price is back to Feruary levels, while US REITS are still ~25% below. On an earnings basis that is almost a 40% re-rate relative to equities.'

Quay went on to report that, despite some sectors which are facing obvious challenges, on a fundamental basis earnings for real estate have remained true to label and proven to be quite resilient, and that the fund's investments are proving to be just as or even more resilient.

The Airlie Australian Share Fund returned -3.42% in September, to take 12 month performance to -2.93% against a loss of -10.21% for the ASX200 Total Return Index (TRI). Over the last 12 months the fund has recorded an upcapture ratio of 111% by returning 34% in the 7 positive months, whilst avoiding the worst of the 5 drawdown months with a downcapture ratio of 88%.

Over the September quarter, which incorporated the reporting season, the fund rose 1.21% to outperform the ASX TRI which fell -0.44%. The fund's exposure to the building materials sector both at home and in the US via holdings in Reece and James Hardie (up 40% and 20% respectively) provided solid returns, whilst on the negative side weak energy markets negatively impacted holding in Origin (-18%) and Ampol (-18%).

Commenting on the reporting season Portfolio Managers Matt Williams and Emma Fisher noted that it was 'one for the ages' as COVID19 wreaked havoc on global economies, and the average ASX200 company saw earnings per share in the 2nd half of FY2020 fall by 38%, with financials, REITS and energy stocks bearing the brunt of the crisis. On the positive side retail, iron ore, and technology thrived. Goverment spending, opening of borders and the possibility of a vaccine in 2021 could see sentiment and performance improve going forward. In particular the managers noted that the lack of spending alternatives, particularly overseas travel which accounts for approx. $40 billion p.a. or ~12% of retail sales, could help offset negative themes such as the staged withdrawal of stimulus spending.