24 Sep

Returns and Price Movement of 3 Real Estate Mutual Funds 

WRITTEN BY Pete Raine FEATURED IN Macroeconomic Analysis

Weaker returns 

In this series, we’re looking at three US real estate equity funds: the T. Rowe Price Real Estate Fund (TRREX), the Cohen & Steers Realty Shares (CSRSX), and the Fidelity Real Estate Investment Portfolio (FRESX). The one-year average annual return ended August 31, 2015, for these three funds are comparable.

Average annual returns for the T. Rowe Price Real Estate Fund (TRREX) and the Cohen & Steers Realty Shares (CSRSX) were 2.41% and 2.33%, respectively. The return for the Fidelity Real Estate Investment Portfolio (FRESX) was 1.39%. The returns are lower compared to the average annual return over three-year and five-year periods of the funds.

For example, the average annual return of TRREX for the three-year period is 8.98% and 14.53% for the five-year period. The returns are disclosed by the respective fund issuers and are taken from the respective fund’s website. The top three holdings of FRESX as of June 30,2015, were Public Storage (PSA), Simon Property Group (SPG), and Host Hotels & Resorts (HST).

Returns and Price Movement of 3 Real Estate Mutual Funds 

Price movements are in mutual sync 

All three funds—the T. Rowe Price Real Estate Fund (TRREX), the Cohen & Steers Realty Shares (CSRSX), and the Fidelity Real Estate Investment Portfolio (FRESX)—have followed the same line in terms of price movement. The funds’ similar price movements further emphasize the strong correlation of the real estate funds with the macroeconomic factors rather than only intrinsic factors.

Comparing the week-over-week price variation for the last five years, the relative standard deviation, also called the coefficient of variation, in the  prices is very comparable. Relative standard deviation (or RSD)  is used to compare the volatility of the prices. Standard deviation can be defined as the deviation of the data points from the mean of the data set. RSD is the ratio of the standard deviation to the mean of the data set.

FRESX prices had an RSD of 18.1%. In a similar manner, CSRSX and TRREX had a relative standard deviation of 17.6% and 17.9%, respectively. The above graph shows the trend in the weekly price change over the last one year for the three funds. The similar movement of the prices of the funds can be attributed to the similar composition or similar exposure strategy.

Latest articles

While the overall cannabis sector experienced weakness on April 23, some stocks managed to gain some positive momentum in the first half of the day.

After being listed on the NASDAQ (QQQ) on March 29, Lyft (LYFT) stock has traded on a negative note so far.

23 Apr

Coca-Cola Stock Rises on Impressive Q1 Results

WRITTEN BY Sharon Bailey

Coca-Cola (KO) impressed investors with better-than-expected revenue and earnings for the first quarter.

23 Apr

Why Microsoft Bought Express Logic

WRITTEN BY Rachel Gunter

Microsoft (MSFT) announced this month that it had acquired a San Diego startup called Express Logic for an undisclosed amount.

Spirit Airlines is scheduled to report its first-quarter results on April 25. The airline has an impressive record of beating earnings estimates.

On April 23 before the market opened, legacy motorcycle maker Harley-Davidson (HOG) reported its first-quarter earnings results.