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Health care Reits to be added to Dow Jones Wilshire real estate indices


Dow Jones Indexes and Wilshire Associates have announced that health care Reits will be added to the Dow Jones Wilshire Global Real Estate and Dow Jones Wilshire Global Real Estate Securit

Dow Jones Indexes and Wilshire Associates have announced that health care Reits will be added to the Dow Jones Wilshire Global Real Estate and Dow Jones Wilshire Global Real Estate Securities indices, as well as to the US versions of the indices, as of September.

To qualify, a health care Reit must meet the indices’ minimum market capitalization requirement of USD200m and derive more than 75 per cent of its revenues from the ownership of income-producing real estate.

Dow Jones Indexes and Wilshire Associates have agreed to the rules change allowing health care Reits into the indices because these Reits perform more like other equity Reits than like health care stocks.

When the Dow Jones Wilshire Real Estate Indexes were being developed in 1990-91, health care Reits were greatly influenced by trends and developments in the health care industry, but were less affected by trends in the real estate market, so they were deemed ineligible for the indices.

Today, by contrast, health care Reits are generally perceived as investors in real, somewhat specialised properties, rather than as adjuncts to the delivery of health care services, and thus their performance is affected more by trends in the real estate market than health care field.

The rules change allowing the addition of Reits to the indices will become effective as of the September quarterly shares and float review. Preliminary component changes resulting from the quarterly review will be announced after the close of trading on Friday, September 7, and will become effective after the close of trading on Friday, September 21.

Dow Jones Indexes develops, maintains and licenses indices for use as benchmarks and as the basis of investment products. Best known for the Dow Jones Industrial Average, Dow Jones Indexes also is co-owner of the Dow Jones Stoxx pan-European indices, and together with Wilshire Associates, provides the Dow Jones Wilshire Global Index family, which covers more than 12,000 securities in 59 markets. The firm also maintains various alternative indexes, including measures of the hedge fund and commodity markets.

Founded in 1972, Wilshire Associates is a global investment technology, investment consulting and investment management firm with four business units, Wilshire Analytics, Wilshire Funds Management, Wilshire Consulting, and Wilshire Private Markets. The firm pioneered the application of investment analytics and research to investment management for the institutional marketplace, and helped develop the field of quantitative investment analysis that uses mathematical tools to analyse market risks. Based in Santa Monica, California, with nine offices on four continents, Wilshire serves clients in more than 20 countries with assets totalling more than USD12.5trn.

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