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Global Real Estate Fund Q2 2021 Market and Fund Commentary

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Global real estate stocks posted another strong return in the second quarter of 2021, extending the robust but choppy recovery that began in the second quarter of 2020, as rising Covid-19 vaccination rates fueled a re-opening of the global economy. The FTSE EPRA Nareit Developed Index (the “Index”) had a total return of 9.42% for the quarter, while the James Alpha Global Real Estate Investments Fund (the “Fund”) generated a total net return of 8.29%, underperforming the Index by 113 basis points.

During the quarter, capital markets were bolstered by the strong growth in vaccination rates across regions. The success of the global vaccine roll-out, as well as evidence that the existing vaccines provide substantial protection against novel mutations of the virus, helped to assuage investor concerns over the new, highly contagious Delta variant, which has spread quickly across India and the United Kingdom.

The global REIT market also largely shrugged off signs of strengthening inflation over the quarter, as investors continued to debate whether the current spike is structural or transitory in nature. Regardless, a historical review of listed real estate returns during periods of rising inflation serves as a reminder that real estate values tend to increase with inflation, as rising inflation is typically an indicator of a growing economy – the most important driver of returns for most property types. Additionally, commercial real estate leases often incorporate annual rent escalators, providing additional protection of real estate cash flows during inflationary periods.

In light of the positive vaccine news, the global REIT market favored those sectors with direct exposure to the re-opening of the economy. Sectors such as Self-Storage and Residential, whose fundamentals

have faced significant headwinds during the pandemic, were buoyed by a steady rotation of capital as the market recognized the pent-up demand that will drive cash flows in these property types as the pandemic continues to recede.

While the adoption of the vaccines has reduced some of the most significant risk factors facing investors, the market has continued to experience episodes of heightened volatility in response to the exogenous risk factors that still confront the market – including the size and timing of additional fiscal stimulus, the prospect of rising inflation, uncertainty over the timing and pace of withdrawal of monetary stimulus, the risk of Covid-19 variants and U.S.-China trade tensions. Over the second quarter, these exogenous factors caused the market to divert its focus from industry fundamentals, creating a transitory flight to lower-quality benchmark constituents and imposing headwinds on portfolios managed with high Active Share, such as ours.

Attribution Of The Fund’s Q2 2021 Performance

The most notable contributors and detractors to the Fund’s relative performance over the second quarter are outlined below:

  • The Fund’s stock selection in Specialty sector, including its exposure to the Towers and Data Center sub-sectors and stock selection in the Health Care sector, were contributors to relative returns vs. the benchmark.
  • The Fund’s stock selection in the Diversified sector, where some high-quality Hong Kong and Japanese holdings lagged the benchmark following a period of strong returns, was a detractor to relative returns. The Fund’s underweight to the Self-Storage sector was also a detractor to performance vs. the index, as lower quality benchmark constituents benefited from the pandemic-recovery trade.


As we look ahead, the trajectory of global REIT prices in the coming months will continue to reflect the market’s fixation on the tension between the vaccine-induced return to normal (albeit, a “normal 2.0” in the wake of systemic societal changes created or accelerated by the pandemic) and the near-term economic impact of the pandemic, resulting in elevated volatility that will create compelling buying, and in turn, selling opportunities for actively-managed portfolios like the Fund’s.

We believe our high conviction, benchmark-agnostic investment approach allows us to maintain a focus on identifying and owning what we feel are the highest-quality companies in our investable universe.
We have high conviction in our fundamental research and confidence in the management teams of the companies we own.  While global capital markets continue to experience transitory periods of market fixation on non-fundamental factors, our portfolio is well-positioned to recover when investor attention turns back to fundamentals.









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A Shares (NAV)








A Shares with Max Sales Load








Morningstar Global Real Estate Category






Developed Index






Source: Morningstar Direct. Performance data quoted above is historical. Past performance does not guarantee future results and current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment will fluctuate, so that shares when redeemed may be worth more or less than their original cost. Investors cannot directly invest in an index, and unmanaged index returns do not reflect any fees, expense, or sales charges. The Fund’s management has contractually waived a portion of its management fees until March 19, 2023 for I, A, C  and R6 Shares. The performance shown reflects the waivers without which the performance would have been lower. Total annual operating expenses before the expense reduction/reimbursement are 1.19%, 1.44%, 2.19% and 1.21% respectively; total annual operating expenses after the expense reduction/reimbursement are 1.05%, 1.44%, 2.19% and 0.95% respectively 1. 5.75% is the maximum sales charge on purchases of A Shares. For performance information current to the most recent month-end, please call 888-814-8180.

1 The Fund’s investment adviser has contractually agreed to reduce and/or absorb expenses until at least March 19, 2023 for I, A, C and R6 Shares, to ensure that net annual operating expenses of the fund will not exceed 1.04%, 1.69%, 2.37%  and 0.94%, respectively, subject to possible recoupment from the Fund in future years.

* The Fund operated as a closed-end interval investment company from the listed inception date until May 13, 2011, when it was converted to an open-end investment company (commonly referred to as a “mutual fund”).

The FTSE EPRA Nareit Developed Global Real Estate Index is comprised of publicly-traded REIT securities in developed countries worldwide which have met certain financial criteria for inclusion in the Index. Each company must derive the bulk of its earnings through the ownership, management or development of income-producing commercial real estate.

About the Author, Andrew J. Duffy, CFA®:

Andrew Duffy is the Senior Portfolio Manager of the Easterly Global Real Estate Fund, a mutual fund that invests in publicly-traded global REIT securities. Mr. Duffy has more than 29 years of global real estate securities investment experience.

Mr. Duffy co-founded Ranger Global Real Estate Advisors, LLC in 2016 and serves as the Chief Investment Officer. Previously, he served as the Senior Portfolio Manager with Ascent Investment Advisors. Prior to joining Ascent Investment Advisors, Mr. Duffy was a Managing Director with Citigroup Principal Strategies, where he managed a long/short portfolio of global real estate securities. From February 2005 until January 2008, he was with Hunter Global Investors, L.P. where he was the Co‐Portfolio Manager of the Hunter Global Real Estate Fund, LP. Before that he was a portfolio manager at TIAA‐CREF for more than six years, during which time he was directly responsible for managing more than $3 billion in global real estate equity and debt securities. Between 1993 and 1999, Mr. Duffy was a Senior Research Analyst at Eagle Asset Management, where he launched and managed a dedicated real estate securities investment program.

Prior to his career in investments, Mr. Duffy served for five years as an officer in the United States Army, where his assignments included serving in the 7th Special Forces Group and the 82nd Airborne Division. Mr. Duffy received a BS from the United States Military Academy at West Point in 1979 as a Distinguished Graduate (top 5% of class) and an MBA from Harvard Business School in 1986. He earned the Chartered Financial Analyst® designation in 1996.

Risks & Disclosures

Past performance is not a guarantee nor a reliable indicator of future results. As with any investment, there are risks. There is no assurance that any portfolio will achieve its investment objective. Mutual funds involve risk, including possible loss of principal. The Easterly Funds are distributed by Ultimus Fund Distributors, LLC. Easterly Funds, LLC and Ranger Global Real Estate Advisors, LLC are not affiliated with Ultimus Fund Distributors, LLC, member FINRA/SIPC. Certain associates of Easterly Funds, LLC are securities registered with FDX Capital LLC, member FINRA/SIPC.

There is no assurance that the portfolio will achieve its investment objective. The Fund is subject to stock market risk, which is the risk that stock prices overall will decline over short or long periods, adversely affecting the value of an investment.  Risks of one’s ownership are similar to those associated with direct ownership of real estate, such as changes in real estate values, interest rates, cash flow of underlying real estate assets, supply and demand and the creditworthiness of the issuer. International investing poses special risks, including currency fluctuations and economic and political risks not found in investments that are solely domestic.  Incorporating alternative investments into a portfolio presents the opportunity for significant losses including in some cases, losses which exceed the principal amount invested. Also, some alternative investments have experienced periods of extreme volatility and in general, are not suitable for all investors. Asset allocation and diversification strategies do not ensure profit or protect against loss in declining markets.

Easterly Funds, LLC serves as the Advisor to the Easterly Funds family of mutual funds and related portfolios. Their form ADV can be found at Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see prospectus, or if available, a summary prospectus containing this and other important information. Read it carefully before you invest or send money. Mutual Funds are distributed by Ultimus Fund Distributors, LLC. Members of FINRA and SIPC.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund. This and other information is contained in the Fund’s prospectus, which can be obtained by calling 888-814-8180 and should be read carefully before investing. Additional Fund literature may be obtained by visiting

As with any investment, there are multiple risks associated with REITs. Risks include declines from deteriorating economic conditions, changes in the value of the underlying property and defaults by borrowers, to name a few. Please see the prospectus for a full disclosure of all risks and fees.