Plexus Wealth BCI Property Fund Blazing ahead with an impressive track record

The Plexus Wealth BCI Property Fund is one of those rare funds that has performed exceptionally well in its category over all time periods for more than a decade.

Launched in 2009, the fund has excelled in a category that now contains more than 45 collective investment schemes. It was a runner-up in the 2018 Raging Bull awards and a nominee for the awards in 2023.

“These nominations definitely inspire us to stick to what we believe in,” says fund manager Amanda de Wet.

Investment insight

“Like most investors, we like to be over weight in companies with good quality assets, strong information systems and a great management team. But being cognisant of having to generate a reasonably high-income component of the return, we also include companies with unglamorous assets but high-quality income streams, so long as there is a strong management team in place.”

While the fund is largely benchmark agnostic, De Wet still ensures there is adequate liquidity within the fund.

“Being a smaller fund, we are also able to more easily take advantage of good growth opportunities. This includes identifying mispricing and investing in smaller companies that of ten fall outside of the investment mandate of the larger funds.”

Common challenges

She admits the real estate sector has been tough in recent years. It also faces the same challenges nearly all South African businesses face right now, which are predominantly lack-lustre economic growth and power constraints.

“Fundamentally, however, the real estate sector is looking better locally than it has in the last three years,” she says. “Shopping malls are buzzing, rental reversions are decreasing and vacancies are trending downwards.”

In addition, de Wet says REIT balance sheets are improving. “Many of the funds have star ted retaining some of their distributable income to bring down debt levels, or at least stabilise them.

“In the Central and Eastern Europe (CEE) region, REITs rental growth is strong and buffering potential negative property revaluations that are to be expected in higher interest rate environments. Despite facing the headwinds in the local proper ty sector, REITs offer an attractive income yield of 8%-12% and remain a good building block in a diversified investment portfolio.”

Who should consider investing in the fund?

Property provides a great diversifier in your current portfolio. Exposure to another asset class reduces the overall risk in a portfolio. Property also offers benefits that stocks and bonds do not provide and enhances income.

The primary objective of the Plexus Wealth BCI Proper ty Fund is to provide a high income and long term capital appreciation. It is suited to investors with a medium to long-term investment horizon and a moderate-high risk profile. The fund can enable investors to diversify their portfolio and gain benefits that stocks and bonds do not provide.

Please speak to a Plexus Wealth advisor for independent financial advice to determine which course of action would be appropriate for you.