Early in June this year, the alternative investments used in SWM portfolios were reviewed by the investment committee. For a number of years, two Vanguard Real Estate Investment Trusts (REITs) were included as an alternative source of returns. REITs purchase shares of companies which earn revenue primarily from managing commercial property. While REITs don’t produce returns as high as regular share funds, they behave differently, offering a diversification benefit.
Following the review, the standpoint on including REITs as an alternative source of returns was unchanged. We did however believe Dimensional’s Global Real Estate Trust (GRET) could provide better exposure to this asset class, while utilising more efficient trading. After we reviewed the general characteristics and past returns for both options, we decided to make the recommendation to all clients to sell the Vanguard holdings to purchase units in Dimensional’s GRET.
The recommendation to change from Vanguard ETFs to Dimensional’s GRET was sent to all clients on the 29th of June. After receiving confirmation from each client, the change was implemented in early August. We would like to take this opportunity to thank everybody for their prompt reply. With your cooperation, the change was made in a timely fashion with no major hurdles.