PIR methodology for rating A-REITs
PIR provides recommendations on listed A-REITs for a 12-month horizon. PIR evaluates recommendations on individual A-REITs continuously, based on expected total returns (distribution yield plus capital growth) using a range of valuation methodologies. The two most commonly used valuation techniques are Discounted Cash Flow (DCF), which uses an A-REIT’s expected free cash flow, and the Net Asset Valuation (NAV) approach.
The 12-month Total Return is compared with set total return bands and assigned a recommendation accordingly. The stock is assigned a 12-month Recommendation. Please refer below for more detail.
Listed - RATINGS
At times of extreme volatility, it is quite possible that the recommendations will swing between each of our bands. During such times, PIR will adopt a more flexible approach to recommending stocks, based on a slightly longer duration, and as such recommendations may appear to be inconsistent when compared with the bands above. This is to avoid clouding value judgments with short-termism.
PIR methodology for unlisted property funds & managed schemes
PIR has developed a framework for rating investment product offerings in Australia. Our review process gives consideration to a broad number of qualitative and quantitative factors. Essentially, the evaluation process includes the following key factors: product management and underlying portfolio construction; investment management, product structure, risk management, experience and performance; fees, risks and likely outcomes.
Financial advisers and investors should note that for all ratings categories, the product may not suit the risk/return profiles of all investors. Please refer below for more detail.
Unlisted & Managed scheme - RATINGS