Are there pockets of strength in real estate?

How Guillermo de Las Casas seeks to weather this volatile market.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print

"The global COVID-19 pandemic presents extraordinary health challenges and unprecedented economic risk due to reduced investment and consumption, but I believe Fidelity® International Real Estate Fund (FIREX) is positioned to weather the challenges we've seen in early 2020," says Portfolio Manager Guillermo de Las Casas. Risk mitigation has been an important part of de Las Casas's strategy since he began managing the fund in 2010, he notes, explaining that the fund has outperformed its benchmark, on average, in periods when the market is in the red.

He cites continued risks to the real estate sector amid financial hardships faced by malls, hotels, senior living facilities, airports, and the student housing segment.

Despite potential hardships spilling into the Continental European rental residential sector, high levels of socio-economic safety nets in Germany and Scandinavia have mitigated significant earnings erosion from the pandemic in those regions, he says.

Logistics and self-storage also have shown resilience, and even growth. Because of the pandemic, governments are realizing how vital logistics networks are to the outright safety of the population. These sectors have continued to see strong demand from e-commerce and health care services to mitigate the losses in the high street, de Las Casas says.

For this reason, he has positioned the fund in residential, logistics, and self-storage real estate companies with relatively strong balance sheets because he thinks they could be well-positioned throughout the pandemic and when the economy eventually recovers.

"I've also sought to invest in real estate firms with earnings I think are relatively resilient, while keeping an eye on companies that are mispriced for the longer term," he says.

Next steps to consider



Find stocks


Match ideas with potential investments using our Stock Screener.



5-step guide to trading


Learn what you need to know before trading the market.

A collection of current insights from our portfolio managers.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

Changes in real estate values or economic conditions can have a positive or negative effect on issuers in the real estate industry.

Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets.

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.

As with all your investments through Fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing this investment by making it available to its customers.

Past performance is no guarantee of future results.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

857246.97.0
close
Please enter a valid e-mail address
Please enter a valid e-mail address
Important legal information about the e-mail you will be sending. By using this service, you agree to input your real e-mail address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an e-mail. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf.The subject line of the e-mail you send will be "Fidelity.com: "

Your e-mail has been sent.
close

Your e-mail has been sent.