Case study
FTSE custom team delivers equity REIT indices
The challenge: As a result of the changing landscape of the US equity REIT equity market and credit market dislocations in 2008, certain FTSE NAREIT indices became highly concentrated which detracts from the investment manager's ability to gain meaningful investment exposures.
The custom solution:The objective was to broaden the investment exposure and find a meaningful risk and reward balance for the FTSE NAREIT indices that were impacted by adversarial market conditions. FTSE’s custom team worked with its US-based index partner, the National Association of Real Estate Investment Trusts (NAREIT) to create an overall capping methodology as well as expand the inclusion criteria for two indices.
In addition to the capping of the methodology, the FTSE NAREIT Residential Index inclusion criteria was expanded to include constituents from the health care and self storage sectors. The FTSE NAREIT Mortgage REIT Index inclusion criteria was also expanded to include constituents from the mortgage finance and regional bank sector (which includes US Regional Banks, Savings & Loans and Thrifts).
The output: The FTSE custom team's collaboration with NAREIT helped support four iShares ETFs issued by Barclays Global Investors (BGI), which are benchmarked to the FTSE NAREIT Industrial/Office Index, the FTSE NAREIT Residential Index, the FTSE NAREIT Retail Index, and the FTSE NAREIT Mortgage REITs Index.
For more information email custom@ftse.com
iShares® is a registered trademark of Barclays Global Investors, N.A.. This information is not an offer to sell or a solicitation of an offer to buy shares of any iShares Fund to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.
