While it does not determine the future potential for any fund, fully understanding a fund’s performance-to-date, where the positives and negatives have come from, is key. Furthermore, an investor should assess the manager’s expectations for both levels and sources of future performance, squaring these with the fund strategy in the context of the market outlook previously discussed.
Listed below are a set of questions that should help draw out this information on performance:
It is also important to fully understand what has been going on within the portfolio and to analyse some key portfolio statistics. One of the most important elements of real estate investing is the income return, so an investor should focus too on the details of a fund’s income profile and the level of risk implied by that.
For actively managed portfolios, investors should seek details of what has occurred already and what the planned initiatives are, the costs and the expected returns.
Listed below are a set of questions that should help draw out this information on the portfolio:
