By combining the benefits of commercial real estate ownership with the features of publicly traded stocks, real estate securities offer investment characteristics that we believe make a compelling case for the asset class.
An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes.
Barclays Capital Global Aggregate Bond Index is designed to be a broad-based measure of the global investment-grade, fixed-rate, fixed-income corporate markets outside of the United States. Barclays Capital U.S. Aggregate Bond Index (formerly the Lehman Brothers U.S. Aggregate Bond Index) is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds. Barclays Capital U.S. Corporate High Yield Index covers the universe of fixed-rate, non-investment grade debt. Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-emerging-market countries are included. Original issue zeroes, step-up coupon structures, 144-As and pay-in-kind bonds (PIKs, as of October 1, 2009) are also included. Bloomberg Commodity Index (formerly the Dow Jones-UBS Commodity Index) is a broadly diversified index that tracks the commodities markets through commodity futures contracts. FTSE NAREIT All REIT Index is an unmanaged, market-capitalization-weighted index of all publicly traded U.S. REITs, including companies that invest in the equity ownership of real estate, timberland and timber-related products and activities, infrastructure REITs, and assets invested in mortgage loans or mortgage-backed securities. FTSE NAREIT Equity REIT Index is an unmanaged, market-capitalization-weighted index of all publicly traded U.S. REITs that invest predominantly in the equity ownership of real estate, not including timber and infrastructure. FTSE EPRA/NAREIT Developed Real Estate Index is an unmanaged market-weighted total return index which consists of many companies from developed markets whose floats are larger than $100 million and who derive more than half of their revenue from property-related activities. FTSE EPRA/NAREIT Emerging Markets Real Estate Index (net) is designed to track the performance of listed real estate companies in emerging countries worldwide and is net of dividend withholding tax. Hang Seng Index is an index tracking several dozen publicly traded companies listed on the Hong Kong Stock Exchange, weighted for market capitalization. MSCI EAFE (Europe, Australia, Far East) Index is used to measure international equity performance. It comprises 22 MSCI country indexes, representing the developed markets outside North America. MSCI Europe Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of the developed markets in Europe. The MSCI Europe Index consists of the following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. MSCI World Index consists of a wide selection of stocks traded in 24 developed countries. It is weighted for market capitalization and is considered an important benchmark of the state of global stock markets. Russell 2000 Index measures the performance of the 2000 smallest U.S. companies in the Russell 3000 Index, which, in turn, measures the performance of the 3000 largest U.S. companies. S&P 500 Index is an unmanaged index of 500 large-capitalization, publicly traded U.S. stocks representing a variety of industries.
The views and opinions in the preceding commentary are as of the date of publication and are subject to change. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice, is not intended to predict or depict performance of any investment and does not constitute a recommendation or an offer for a particular security. We consider the information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Performance data quoted represents past performance. Past performance does not guarantee future results. There is no guarantee that any historical trend illustrated in this commentary will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that a market forecast made in this commentary will be realized.
Risks of Investing in Real Estate Securities
Property values may fall due to increasing vacancies, declining rents resulting from economic, legal, tax, political or technological developments, lack of liquidity, limited diversification and sensitivity to certain economic factors such as interest rate changes and market recessions. The risks of investing in REITs are similar to those associated with direct investments in real estate securities. Foreign securities involve special risks, including currency fluctuations, lower liquidity, political and economic uncertainties, and differences in accounting standards. Some international securities may represent small- and medium-sized companies, which may be more susceptible to price volatility and less liquidity than larger companies.
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