The markets rarely proceed in a straight line, and the third quarter was no exception.
Following the brief panic in the aftermath of the Brexit vote, property stocks were up strongly in July as the market refrain became “lower for longer” in regards to interest rates. Following that big July, property stocks declined as we headed into the creation of the new Real Estate GICS sector at the end of August in what appeared to be a “buy the rumour, sell the news” event. As we predicted amid the hyperbole regarding the potential impacts of the new GICS sector, very little happened around the event. We certainly didn’t see the $100 billion of inflows that some were touting. That said, we continue to view the new Real Estate GICS sector as a positive in the long run for the industry as it recognises real estate as the distinct asset class it has proven to be.