Exchange-traded fund assets linked to the FTSE EPRA/NAREIT Global Real Estate Index Series reached USD10.5bn in assets under management as of 30 April 2013.
In total, more than USD176bn of ETF assets are currently benchmarked to FTSE indices worldwide.
Launched in 2005, the index has expanded from the original Developed index to include a wide range of indices covering developed and emerging markets, Dividend+ and sector indices. In May 2013 FTSE launched the latest in the Series – the FTSE EPRA/NAREIT Developed Super Liquid Index. Constituents are chosen from the most highly liquid constituents of the FTSE EPRA/NAREIT Developed index, while retaining the characteristics of the underlying index. All FTSE’s Super Liquid indices are easier to replicate than their underlying indices.
FTSE collaborates with EPRA and NAREIT, a REIT trade associations in Europe and North America. Constituents are liquidity-screened and the indices are calculated using actual free float to enhance transparency and investability. ETFs benchmarked against the index series are listed by six issuers on seven exchanges across Europe and North America.
Jonathan Horton, president of FTSE Americas and head of FTSE’s ETP service unit, says: “This is an important milestone which underlines both FTSE’s position as the pre-eminent provider of global real estate benchmarks and as the preferred index provider for ETF issuers seeking to create new opportunities in real estate investment. We look forward to building on this success with our partners at EPRA and NAREIT to create innovative new tradable real estate indices which expand investor choice.”
“This significant development underscores the fact that liquid and diversified real estate investment is now available to investors worldwide through a growing number of financial products, due in part to the successful partnership undertaken by NAREIT and EPRA with FTSE,” says Steven A Wechsler, NAREIT president and chief executive.
Fraser Hughes, director of research, indices & investor outreach at EPRA, says: “The interest in accessing real estate does not surprise us. Investors’ thirst for yield, coupled with longer-term performance make EPRA/NAREIT ETFs a proxy for direct real estate investment. The EPRA/NAREIT selection process ensures only quality buildings managed by top quality executive teams are included.”