REIT index composition index question

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Kelly
Posts: 247
Joined: Sun Nov 18, 2012 7:39 am

REIT index composition index question

Post by Kelly » Thu Jan 26, 2017 10:35 am

Does anyone know what the differences are between the Dow Jones US Real Estate Index (iShare IYR) and MSCI US REIT Index (Vanguard VGSLX). Looking at historical returns in M* I see a large differences. I would think that two indexes tracking the same sectors would be close after cost. In 2014 VGSLX did 3.7% better. Why?

Many thanks for any insight!

Kelly

User avatar
Pajamas
Posts: 4697
Joined: Sun Jun 03, 2012 6:32 pm

Re: REIT index composition index question

Post by Pajamas » Thu Jan 26, 2017 5:26 pm

They track two different indexes with different compositions as you can see just from the top ten holdings. Here are the fact sheets in pdf:

https://www.msci.com/documents/10199/08 ... f749bb459b

(U.S. equity REITs only)

https://www.djindexes.com/mdsidx/downlo ... _Sheet.pdf

(U.S. REITs and other companies that invest directly or indirectly in real estate through development, management or ownership, including property agencies.)

jalbert
Posts: 2746
Joined: Fri Apr 10, 2015 12:29 am

Re: REIT index composition index question

Post by jalbert » Fri Jan 27, 2017 12:00 am

The MSCI index excludes mortgage REITs, which essentially are leveraged fixed-income portfolios.
Risk is not a guarantor of return.

Post Reply