European Residential REIT (ERES) is a newer addition to the MWG Income Growth Fund, with a 4% weighting. We owned a prior edition of the REIT (one with a commercial focus) in 2019, exiting our investment after an acquisition/restructuring by CAP REIT, a large Canadian multi-family REIT that owns 66% of ERES units. We added the name back to the portfolio as the REIT emerged with a new strategy focused on multi-residential units in the Netherlands. We believe there are several tailwinds that should benefit the units. Read
Inflation, and the Federal Reserve’s response to its economic threat, has been the dominant driver of financial markets for the past five months, culminating in the Personal Consumption Expenditures Price Index (PCE) reaching a 40-year high last week. There are numerous drivers for this: housing/rent increases, shortages of durable goods (from autos to air conditioners), decade-high energy and commodity costs, supply chain bottlenecks and labour shortages. In response to the inflationary threat, the Fed has committed to a rapid succession of interest rate hikes to rein in prices. Read
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