Of all the sectors covered by Broker Consulting’s mutual fund indexes, only real estate showed any growth in February. “Developments on the markets were influenced primarily by macroeconomic data, which was mixed in character,” says the company’s chief analyst Martin Novak. “On the one hand, the reduced risk of a recession in the USA improved the mood on markets. But inflation numbers had a negative impact because they suggest it will be necessary to repress inflation for longer than expected.” Broker Consulting tracks stock funds, bond funds, as well as money market, commodity and real estate runds. Its commodity and share funds fared worst in February, as they both fell more than 3 percent. Money market funds nearly broke even (-0.28%), while bond funds fell by 1.49%.
But real estate funds rose 0.35% in February and have gained 7.68% over the past 12 months. Unlike the other sectors tracked by Broker Consulting, the funds included in the real estate index are made up primarily of Czech-based funds. This is one reason the negative mood on international real estate markets could take longer to be reflected in the value of local real estate funds. Market sources report that Czech funds continue to see inflows, which isn’t so surprising in view of the deep belief investors here have in property as an inflation hedge. If investors began pulling their money out, funds could come under pressure to sell assets, which would hurt property prices. However, there’s no sign of this happening at the moment. Rent indexation should also be bolstering real estate fund values, though it remains to be seen how far landlords can push their tenants when it comes to matching CPI.
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