Fund commentary

The SWIP Real Estate Fund modestly lagged the benchmark in the first quarter, largely dragged down by Cohen & Steers’ difficulty to add value in the Asia-Pacific region. At the Fund level, stock selection drove losses, most evidently in Hong Kong where the overweight position further detracted. Stock picks also proved inefficient in Australia and Singapore. In contrast, the overweight to emerging countries such as Brazil and the Philippines helped mitigate some of these losses.

• AEW slightly underperformed the benchmark during the quarter as the result of ineffective stock selection in Asia. Stock selection was weakest in Japan and Singapore, with marginally negative results in the US. Regional allocation was modestly positive due to an overweight to Asia.
• Cohen & Steers underperformed relative to the benchmark during the quarter. An overweight to Hong Kong, in addition to weak stock selection across the Asia-Pacific region, significantly detracted from performance. Stock selection in the US was a modestly positive contributor to performance.
• Invesco performed in line with the benchmark, as the negative effect of regional allocation was roughly offset by the positive impact of effective stock selection. An overweight to Hong Kong detracted from performance, while stock selection within Australia and Japan positively contributed.
• SWIP performed roughly in line with the benchmark, as stock selection benefited relative performance while country positioning detracted. An underweight to the United Kingdom and a zero weight to Italy were detrimental to performance. Stock selection within the United Kingdom and the Netherlands was beneficial.

31 March 2012