The strategy of the Fund is to invest in a globally diversified portfolio of best-in-class, next generation real estate and infrastructure companies that are listed in developed markets. These companies are likely to benefit from the digitalisation of economies, changing the way we work, live and play.

The Fund currently invests in 32 listed companies operating at the intersection of real estate and technology. These companies own physical assets that are vital to the functioning of the digital economy and are active in four specialist sub-sectors: logistics warehouses supporting e-commerce (51.9% portfolio weight), data centres (22.8% portfolio weight), mobile communication towers (21.4% portfolio weight), and networks (2.9% portfolio weight).

Over the course of the month, NAV decreased by 0.7% (C Acc GBP). Since launch, NAV has increased by 1.6% (C Acc GBP). In comparison, the global real estate index has increased by 9.0%*.

In the twelve-month period ending December 2025, NAV increased by 1.3% (C Acc GBP). Over the year, logistics was the best performing sub-sector, up 10.6%. Mobile communication towers, data centres and networks delivered negative returns, down 3.1%, 9.3%, and 17.5%, respectively.

Looking back over the last twelve months, 2025 was a mixed year for the Fund. In the logistics sub-sector, 2025 was a year of two halves, particularly for US-listed companies. Most US logistics companies delivered negative returns in H1, followed by positive returns in H2. This was primarily due to American trade policy, specifically President Trump’s ‘Liberation Day’ tariffs, announced in April. Shares prices for logistics names in the Fund fell on the back of the tariffs as markets feared disruption to supply chains, along with a general decline in economic activity. However, in subsequent quarters companies like Prologis (portfolio weight 7.4%) exceeded market expectations, leading to gains in in H2. European names fared better in general, with both Warehouses De Pauw (portfolio weight 2.8%) and Montea (portfolio weight 2.8%) delivering strong total returns for the year.

While the artificial intelligence (AI) sector dominated news in 2025, leading to share price gains for many associated sectors, companies in the data centre sub-sector were mostly left out of the momentum, and underperformed. Early in 2025, this underperformance was due to the release of DeepSeek, a low-cost AI model. The market assumed a reduction in the cost of AI tools would lead to a fall in AI-related spending, but so far this has turned out not to be the case. In fact, later in the year, investors punished Equinix (portfolio weight 6.4%) for announcing an increase in capex to keep up with the growth in demand for computing power, which is expected to dampen earnings growth over the short term. At the time, the Fund Manager thought the share price reaction was overdone, and indeed Equinix regained some ground in H2 before another sell-off towards the end of the year. After a difficult 2025 for this sub-sector, despite solid company results, 2026 could prove better.

10-Year US treasury yields fell from 4.6% to 4.2% in 2025. While this would normally be a tailwind for the mobile communication towers sub-sector, in sterling terms all US and European companies delivered negative returns in 2025, in part due to dollar weakness (the primary share class for the Fund is unhedged). However, similarly to the logistics sub-sector, the year was a tale of two halves. During the general market sell-off around Liberation Day, the mobile communication towers sub-sector provided portfolio ballast. In H1 the companies held by the Fund had increased by c.6-14%. In H2, US names sold off following the news that AT&T and SpaceX would buy EchoStar's wireless spectrum, which could reduce demand for cell tower sites. European names in the portfolio, notably Cellnex (portfolio weight 2.8%) and Inwit (portfolio weight 2.6%), sold off in H2 due to similar fears of mobile network operator consolidation across Europe.

Gresham House Energy Storage (portfolio weight 2.9%), part of the networks sub-sector, was the top performing portfolio company in 2025, up 72%. The company’s share price benefited from the takeout of listed peer Harmony Energy Storage at a price close to NAV. Gresham House Energy Storage also announced several tolling agreements, reducing cashflow volatility, and reinstated its dividend.

Although certain sub-sectors delivered disappointing shareholder returns in 2025, company results were generally positive. Looking ahead, the Fund offers a c. 3% dividend yield, which should outgrow inflation in 2026. There is also approximately 20% upside to sell-side price targets. The Fund Manager would like to thank shareholders for their continued support in 2025.

*MSCI World IMI Core Real Estate IMI GBP