BELGIUM - Brussels based asset management group, Petercam, has created a new European property index - the Petercam European Property Shares index (PEPS).
The group already calculates the Belgian Real Estate Certificate index (BRECS), used as a barometer for Belgian property investments, but says it has set up the new index in line with the changing outlook of investors.
“Since the introduction of the euro, investors are increasingly acting within a European perspective,” says Sarah Puylaert, a financial analyst at Petercam.
“For this very reason, Petercam has created its new European property index.”
PEPS is to be calculated on a daily basis by Dutch property research specialist, Global Property Research.
Petercam says the problem with existing property indices is that they do not correspond to the investment strategy and risk profiles of pan-European funds.
The manager believes that existing indices have high British representation and that British property shares are subject to higher levels of volatility, which are not compensated for by higher returns.
“ Those indices which are quoted in sterling entail a currency risk for the euro-investor and this is another reason we decided to create the new index,” says Petercam.
The UK’s share of the index is limited to 25% to limit the impact of excess volatility. Other major countries with extensive representation in the index are France (21.1%), the Netherlands (17.4%), and Belgium (10%).