In the fourth quarter of 2025, the Nomura Real Estate Securities Fund recorded a favorable performance, surpassing the FTSE Nareit Equity REITs Index, which serves as its benchmark. This positive outcome occurred amidst a slight increase in 10-year US Treasury yields, which reached 4.17%, with the longer end of the yield curve approaching 4.75%. Despite the challenges posed by higher interest rates, the prevailing anticipation of a more accommodative monetary policy environment sustained investor confidence.
Key contributors to the fund's outperformance included DigitalBridge Group (DBRG), whose all-cash acquisition by SoftBank significantly boosted the fund's returns. This acquisition underscored the successful turnaround efforts and the value realized through strategic mergers and acquisitions. Furthermore, the fund maintained overweight positions in specific sectors, such as data centers and healthcare REITs, aligning with a strategy to capture long-term demand and stable income streams, particularly in an environment where monetary policy easing is expected to support growth.
Looking ahead, the ongoing focus on fiscal responsibility, inflation management, and the Federal Reserve's policy decisions will continue to shape the real estate investment landscape. The strategic allocation and active management of the Nomura Real Estate Securities Fund aim to navigate these dynamics, seeking to capitalize on opportunities presented by evolving market conditions and robust sector fundamentals, ensuring sustained value creation for investors.
