GLOBAL – S&P Dow Jones Indices has launched a new index, the Dow Jones Townsend Core US REIT Index, in collaboration with the Townsend Group.
The new index aims to provide risk/return characteristics typical of direct core real estate investments through a basket of liquid, publicly traded REITs.
The index constituent companies are members of the Dow Jones US select REIT Index.
S&P Dow Jones stressed that while the property types eligible for inclusion were limited to companies involved in activities that are focused on longer-term rent generation, property types that tend to include shorter lease-term focused REITs – such as retail factory outlets, hotels, manufactured homes, mixed industrial/office and suburban office – are excluded.
The index will use a capping scheme to limit single stock concentration.
Michael Orzano, associate director of global equity indices at S&P Dow Jones Indices, said: "The [index] is designed to serve as an investable proxy for privately held core real estate investments.
"[It] fulfils a need in the market for a representative measure of the characteristics of core property investments, constructed using liquid, publicly traded REITs."
Chris Lennon, portfolio manager at the Townsend Group, added that the index would serve as an additional tool for market participants, which can be used to better manage their existing portfolios.