Invest in PGIM India Global Select Real Estate Securities FoF
 

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Introduction to PGIM Global Select Real Estate Securities Fund

Real Assets have a place in an investor’s portfolio, especially during current times, when economies around the world are expected to experience higher inflation going forward, which may or may not be transitory in nature. Real Assets unlike other conventional asset classes viz equity or debt, act as a potential hedge against rising price trends and as such can provide true diversification to investors. One of the traditional ways to gain exposure to Real Assets is though Real Estate. PGIM India Global Select Real Estate Securities Fund of Fund (FoF) enables investors to take exposure to this major asset class, in a convenient, cost effective, affordable manner and one which can potentially offer both capital appreciation as well as income generation opportunities.


Presenting PGIM India Global Select Real Estate Securities FoF

Introducing PGIM India Global Select Real Estate Securities Fund of Fund, for investors who want to invest in Real Estate as an asset class, without undertaking the worries associated with traditional investment options. The fund is an open-ended equity fund of fund scheme investing in the underlying PGIM Global Select Real Estate Securities Fund, providing investors a diversified approach to global Real Estate investing.

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Benefits of investing in
Global Real Estate FoF for Indian investors

  • Unique Global Opportunities
    unique-global-opportunities

    Global Real Estate represents opportunities in various sub-sectors, which are either not available in India or it lacks the global scale and depth. Senior Living, Grade A Offices, Logistics, Cold Storage Facilities, Warehousing, Data Centres, Healthcare, Last Mile Retail, Urban Apartments, Self Storage etc are some examples

  • Potential Inflation Hedge
    potential-inflation-hedge

    Real Asset whose value tends to increase as replacement cost increases over long term. Income generated for REITs has outpaced inflation in 39 out of the past 41 years^

  • Access to Small Ticket Size
    small-ticket-sizes-possible

    Apart from physical real estate (primarily residential) most retail investors in India do not have too many options to participate in the upside that real estate as a sector has to offer. A ticket size as small as Rs. 5,000/- in a FoF structure makes participation in real estate more affordable as well

  • Dual source of Alpha
    dual-source-alpha

    Participation through a REIT structure can offer potentially higher income opportunities. In addition, listed REITs can provide capital appreciation opportunities also, over the long-term. In the last 20 years, 40% of the performance has been through Income for listed REITs*

  • Diversification
    diversification

    Provides diversification beyond the traditional stock/bond combine. Global Real Estate FoF portfolio can provide additional geographical diversification benefit as well. Real estate forms the third largest component of portfolios in developed markets at 14%$ whereas it is neglible in the Indian context.

A Globally Diversified Real Estate Fund is a standalone asset class in itself, due to its unique characteristics. It has the potential to augment the risk-return profile, when combined with a traditional stock/bond portfolio, over the long term

Source: PGIM Real Estate. * as of 31/3/2022, based off the S&P Developed BMI Index. ^Source: NAREIT, Morningstar, data as of 31/12/2022. $ Source: PGIM Real Estate. PGIM Real Estate: The case for Global Real Estate. Past performance is not indicative of future returns.

Why invest in PGIM India Global Select Real Estate Securities FoF?

Globally, real estate as an asset class and as an investment, has undergone a shift during the pandemic. As economies across the world reopen, properties such as Hotels, Assisted Living facilities and Restaurants should benefit from pent-up demand. The pandemic has accelerated trends already underway such as Cloud Computing, Remote Schooling, Remote Working, e-Commerce, Last Mile Retail etc, thus expanding growth opportunities for real estate. Recovering markets create the potential for revenue generation and value appreciation.

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PGIM India Global Select Real Estate Securities FOF provides investment opportunities beyond traditional Commercial or Residential Property

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PGIM Global Select Real Estate Securities Fund, the underlying fund provides investors with exposure across the U.S., European, and Asia Pacific real estate markets among other regions, to find potential opportunities around the world.

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Real Estate continues to remain an asset class where retail investors are under-allocated. A real estate dedicated fund allows investors to take meaningful exposure in this asset class.

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A traditional portfolio of equity and bonds can be complemented by adding real estate, as it can help in diversifying the portfolio further.
(#Source: PGIM Real Estate)

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The underlying fund has:

  • a value-oriented real estate investment focus, based on real estate fundamental research and bottom-up security selection
  • real-time access to proprietary private real estate market information
  • rigorous focus on risk-management in security selection and investment process
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The underlying fund will invest at least 80% of NAV in equity and equity related securities of real estate companies located throughout the world.

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The underlying fund will invest in developed and emerging markets without particular focus on any one geographical location. As on September 30, 2021, the exposure towards North America is 65.9%, Pacific Rim ex Japan is 11.8% and Japan is about 10.8%.

Today’s Real Estate investment opportunities span a wide range of categories

  • senior-living

    Senior Living

    Older population in regions like Europe is expected to grow significantly, which supports ongoing demand. The cashflow tends to be resilient and there is also a growing need for developing modern assets for future care needs.

  • self service storage

    Self Service Storage

    Lower capex. Diversification from traditional real estate

  • Grade A Offices

    Grade A Offices

    Offices are set for a cyclical rebound as staff return to workplaces. Future tenant usage is evolving rapidly, with a renewed focus on quality, benefitting Grade A offices

  • Logistics / Cold Storage

    Logistics / Cold Storage

    Logistics has a strong outlook in all regions, on the back of ongoing leasing momentum and accelerated online spending growth

  • Organized Retailing

    Organized Retailing

    Organized retail has seen sharp value adjustment, may turn the corner soon

  • Last Mile Retail

    Last Mile Retail

    Neighbourhood retail stores have shown resilience against increased online spending and are positioned to perform well as retail spending recovers

  • Residential

    Residential

    Within Residential, as gateway city populations grow further, they are seeing the build-to-rent sector benefitting, as overall housing affordability declines globally

  • Urban Apartments

    Urban Apartments

    Performance expected to rebound swiftly as workplaces and amenities reopen

  • Grade A Offices

    Hotels

    Countercyclical opportunity in Hotel sector for the long term

PGIM Real Estate - One of the largest real estate managers in the world

  • 51

    Years

  • 32

    Offices Worldwide

  • At-A-GLANCE

  • TOP 2

    Global real estate Investment Manager3

  • 1500+ Properties
    43.1 million total Sq Feet
    93000+ Apartment Units
    1 million+ residents
    750,000 offices tenants

  • Scale:

    PGIM Real Estate - $190 billion AUM/AUA2 with $147 billion* of gross debt and equity assets under management (as 3/31/2021), one of the largest real estate managers in the world

  • Global resources:

    PGIM Real Estate has over 1000+ investment professionals with 32 offices on 4 continents as on June 30, 2021

  • Institutional heritage:

    PGIM Real Estate has over 500 institutional clients; 60 have been with the firm for at least 20 years

  • Expertise in private real estate:

    Approximately 90% of commercial real estate is privately owned; about 10% is publicly traded. PGIM Real Estate’s extensive private real estate portfolios provides insights on the public REIT market

PGIM Real Estate. Note: As of March 31, 2021. Past performance is not a guarantee of future performance. 1 Includes legacy lending through our parent, PFI. 2 Net AUM is $124B and AUA is $438.2 Source: Pension & Investments’ annual real estate manager survey as of October 2020. *$124.4 billion total net debt and equity assets as of 3/31/2021

Note: As of March 31, 2021. Past performance is not a guarantee of future performance. 1 Includes legacy lending through our parent, PFI. 2 Net AUM is $124B and AUA is $43B. 3 Source: Pension & Investments’ annual real estate manager survey as of October 2020. *$124.4 Billion total net debt and equity assets as of 3/31/2022.

PGIM India Global Select Real Estate Securities Fund of Fund (FOF) is an offshore FOF feeding into the PGIM Global Select Estate Securities Fund. PGIM Global Select Estate Securities Fund provides investors with exposure across the U.S., European, and Asia Pacific real estate markets among other regions to find potential opportunities around the world

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    Global REITs diversified across multiple themes within the real estate sector

Characteristics of the Underlying fund

A value-oriented real estate investment focus, based on real estate fundamental research and bottom up security selection

  • Real time access to proprietary private real estate market information may create value for clients.
  • Rigorous focus on risk management in security selection and investment process

Real Estate Fundamental Research

Bottom Up Security Selection

Real time Access to Proprietary Private Market Data

Focus on Risk Management

Value Oriented Real Estate

Investment Process: Bottom-Up Analysis Drives Stock Selection

Proprietary Valuation Model

Determine Portfolio Weights

Buy/Sell Discipline

Portfolio Risk Controls

No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment..

Asset Allocation

Asset Allocation:

The Fund will invest in developed and emerging markets without particular focus on any one geographical location. The Fund will not invest more than 20% of its net assets in equity and equity related securities of real estate companies located in emerging markets. The Fund may also hold cash and invest in money market instruments on an ancillary basis and may invest its cash balances in regulated money market or short-term bond funds. The Fund may not be leveraged in excess of 100% of its net asset value, through the use of derivatives.

  • Regional Allocation(%) as on March 31, 2024

     

  • Property Type Breakdown(%) as on March 31, 2024

     
FundBenchmark

Source: PGIM Inc. as of 30-June-2021. Holdings and allocations are subject to change. The benchmark referenced is the FTSE EPRANAREIT Developed index.

FAQs on PGIM India Global Select Real Estate Securities Fund of Fund (FOF)

What is a Global Real Estate Fund of Fund and REITs?

  • Global Real Estate Fund of Fund are mutual fund schemes, which invest in a portfolio of real estate assets including listed REITs and other securities

  • REITs are Real Estate Investment Trust

  • REITs either own, operate, lease or finance real estate properties

  • REITs are structured like mutual funds, which pool money from various investors to invest in different properties

  • By leasing space and collecting rent on its real estate, the company generates income which is then paid out to shareholders in the form of dividends

  • Globally most REITs are listed and thus publicly trade like stocks

How does a real estate company qualify as REIT?

Different countries may have minor variation in requirements for a real estate company to qualify as a REIT. Example, to qualify as REIT in the U.S, a real estate company must:

  • Invest at least 75% of total assets in real estate assets and cash

  • Derive at least 75% of gross income from rents, interest on mortgages that finance real property, or real estate sales

  • Pay a minimum of 90% of taxable income in the form of shareholder dividends each year

  • Be an entity that's taxable as a corporation, but for its REIT status

  • Be managed by a board of directors or trustees

  • Have at least 100 shareholders after its first year of existence

  • Have no more than 50% of its shares held by five or fewer individuals

A company that qualifies as a REIT in the US, is allowed to deduct from its corporate taxable income all of the dividends that it pays out to its shareholders. Because of this special tax treatment, most REITs pay out at least 100 percent of their taxable income to their shareholders and, therefore, owe no corporate tax.

How is a Global Real Estate FoF different from both traditional equities or bonds as an asset class?

A Global Real Estate FoF invests into an underlying fund, which typically invests in REITs and other instruments, which can provide the following characteristics:

  • Has potential to generate higher income opportunities in form of rentals and higher dividend yield

  • Scope of capital appreciation opportunities over a full cycle

  • Traded like a stock. Provides instant liquidity but also makes it volatile

Why one should look at both homeownership and also investing in Global Real Estate FoFs that provide easy exposure to global REITs ?

For a retail investor, a residential house for personal consumption is not necessarily an investment, particularly when financed with a sizable mortgage. It does not produce current income, but rather requires regular mortgage interest, real estate tax, insurance payments and maintenance costs. However it does provide a sense of ownership and fulfils an emotional need for security. In contrast, investing in REITs via a Global Real Estate Feeder Fund, represents investment in varied real estate opportunities, which has the potential to generate continuing income flow from rents and capital appreciation over longer term.

Additionally, Global real estate FoF which invests in an underlying fund, provides liquidity at the fund level and the underlying portfolio is diversified across a range of real estate properties in a variety of geographic locations. By comparison, a house is a comparatively illiquid asset whose investment risk is not diversified, but rather highly concentrated.

What are the benefits of investing in Global Real Estate Feeder Fund v/s Physical Property?

Buying Physical Property Buying Global Real Estate FoF
Huge capital outlay Alternative way for retail investor to take exposure to Real Estate as an asset class in an affordable manner
Can invest in residential property mostly Can invest in Residential, Office space, Retailers, Hospitality, Warehouses, Data centres, Healthcare among others
Liquidity is a big challenge Highly liquid. Underlying REITs mostly listed on stock exchanges.
Research on your own Mutual fund with professionals who invest in a portfolio of REITs and real estate securities
Complexity in transaction Simplicity in transactions

Features of PGIM India Global Select Real Estate Securities Fund of Fund

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  • 01

    Underlying fund:

    PGIM Global Select Real Estate Securities Fund

  • 02

    Investment Objective

    The primary investment objective of the Scheme is to generate long term capital appreciation from investing in the units of PGIM Global Select Real Estate Securities Fund, which primarily invests in REITs and equity and equity related securities of real estate companies located throughout the world. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee/ indicate any returns.

  • 03

    Investment Strategy

    The scheme will invest in units of PGIM Global Select Real Estate Securities Fund (the underlying fund)*.

  • 04

    Benchmark

    FTSE EPRA NAREIT Developed Index.

  • 05

    Fund Manager: Mr. Ojasvi Khicha

    Rahul jagwani,Over 12 years of experience in financial markets, primarily in equity research.

The asset allocation under the Scheme, under normal circumstances, will be as follows:

Instruments Indicative allocations (% of total assets) Risk Profile
Minimum Maximum High/Medium/Low
Units/securities issued by PGIM Global Select Real Estate Securities Fund, domiciled in Ireland 95% 100% Medium to High
Debt Instruments including Government Securities, Corporate Debt, Money Market Instruments, (including cash and units of mutual funds) 0% 5% Low to High
Exit Load
  • 10% of the units allotted may be redeemed/switched-out to debt schemes/PGIM India Arbitrage Fund without any exit load within 90 days from the date of allotment;
  • Any redemptions/switch-outs in excess of the abovementioned limit would be subject to an exit load of 0.50%, if the units are redeemed/switched-out to debt schemes/PGIM India Arbitrage Fund within 90 days from the date of allotment of units;
  • Nil - If the units are redeemed/ switched-out after 90 days from the date of allotment of units;
  • No exit load will be charged for switches and STP between any open-ended equity scheme, hybrid scheme (except PGIM India Arbitrage Fund) and fund of funds scheme.
Minimum Application Amount Rs. 5000 and in multiples of Rs. 1 thereafter
Plans Regular and Direct
Options Growth and Income Distribution cum Capital Withdrawal in each plan;
Dividend Sub Options
  1. Payout of Income Distribution cum Capital Withdrawal facility(IDCW-Payout);
  2. Reinvestment of Income Distribution cum Capital Withdrawal facility(IDCW- Reinvestment).

For detailed assetallocation, please refer the SID and KIM of the scheme.

This product is suitable for investors who are seeking*

  • Capital appreciation over a longer term.
  • Investment in units of overseas mutual funds that invest in equity and equity related securities of real estate companies located throughout the world
  • Degree of risk – VERY HIGH

*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

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Investors will bear the recurring expenses of the scheme, in addition to the expenses of the underlying scheme.The Information contained herein is provided by PGIM India Asset Management Private Limited (the AMC) on the basis of publicly available information, internally developed data and other third party sources believed to be reliable. However, the AMC cannot guarantee the accuracy of such information, assure its completeness, or warrant that such information will not be changed. The information contained herein is current as of the date of issuance* (or such earlier date as referenced herein) and is subject to change without notice. The AMC has no obligation to update any or all of such information; nor does the AMC make any express or implied warranties or representation as to its completeness or accuracy. There can be no assurances that any forecast made herein will be actually realized. These materials do not take into account individual investor’s objectives, needs or circumstances or the suitability of any securities, financial instruments or investment strategies described herein for particular investor. Hence, each investor is advised to consult his or her own professional investment / tax advisor / consultant for advice in this regard. The information contained herein is provided on the basis of and subject to the explanation, caveats and warnings set out elsewhere herein. These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. Distribution of these materials to any person other than the person to whom it was originally delivered and to such person’s advisers is unauthorized, and any reproduction of these materials, in whole or in part without the prior consent of the AMC, is prohibited. The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding investments / disinvestments in securities’ market and / or suitability on the basis of their specific investment objectives and financial positions and using independent advisors as they believe necessary. © 2024 Prudential Financial, Inc. (PFI) and its related entities. PGIM, the PGIM logo, and the Rock symbol are service marks of PFI and its related entities, registered in many jurisdictions worldwide.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

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