The largest provider of financial market indices S&P Dow Jones Indices unveiled the Dow Jones Townsend Core U.S. REIT Index on Wednesday, which provides risk and return characteristics typical of real estate investments through various publicly traded real estate investment trust properties.
The index will provide market participants with tools that can better manage their existing portfolios. Companies featured in the Index are constituted as members of the Dow Jones U.S. Select REIT Index.
Property types eligible to be included in the Index are available to companies that are involved in activities focused on long-term rent generation.
Thus, factory outlets, manufactured homes, mixed industrial/offices and suburban offices are excluded.
"The Dow Jones Townsend Core U.S. REIT Index is designed to serve as an investable proxy for privately-held core real estate investments," said Michael Orzano, associate director of global equity indices at S&P Dow Jones Indices.
He added, "the Index fulfills a need in the market for a representative measure of the characteristics of core property investments, constructed using liquid, publicly-traded REITs."
To enhance diversification and limit single stock concentration, a capping scheme is employed in the Index.