Kelly INDS Index Description
The Kelly Industrial Real Estate Index measures the performance of publicly-traded real estate securities, including Real Estate Investment Trusts (REITs), of exchange listed companies in the U.S. that primarily own and manage industrial properties and facilities (including warehouse/industrial and storage) and rent space in those properties to tenants.
Portfolio Application & Uses
Risk Management &
Strategic Real Estate
Industrial real estate serves as a way to play the burgeoning e-commerce sector. The sector has seen robust absorption from rising manufacturing data due to the tectonic shift in e-commerce purchases. Well-located industrial assets are the backbone of the logistics network, and e-commerce retailers are fiercely competing for space in these distribution centers as the sector is still in the early stages of absorbing the impact of the growth of e-commerce.
Industrial real estate has seen a substantial increase in rents and cap rate pricing, especially in so called “last mile” markets near major metropolitan cities. Economic drivers include: Exports; manufacturing activity; inventories; shipping volumes; business sentiment
Ownership is highly fragmented, and the public REITs own only about 1 percent of all industrial real estate. Despite long lease durations, industrial properties have short construction times due to less-complex building requirements, so supply tends to closely track demand. A shorter property cycle results in greater sensitivity to domestic and global economic growth.
|NUMBER OF HOLDINGS:||17|
|WEIGHTING:||MODIFIED MARKET CAP|
|INDEX PORTFOLIO MNGR||KEVIN KELLY|
TOP 10 HOLDINGS
Kelly Benchmark Indexes holdings and performance history are provided upon request. See the Terms of Service for more information.
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|Kelly Industrial Real Estate Index||INDSSCTR||Total Return||NASDAQ|
Advantages of Real Estate SCTRs
Correlation and risk-adjusted return metrics demonstrate that listed equity real estate investment trusts provide optimal exposure to the real estate asset class.
Allows investors to take or adjust positions quickly and efficiently by buying and selling positions corresponding to the weights of all constituents which are traded on liquid public markets such as NYSE & Nasdaq.
Provides direct access to institutional office real estate diversified over many geographic areas and management teams without investing in properties or with a real estate equity managers
Portfolio Investment Thesis
Potential drivers real estate:
- Market “cap rates”
- Supply/ demand conditions
- Competition from nearby properties
- Employment growth
- Consumer and business spending
- Interest rates
- Lease revenues
- Property expenses
- Occupancy rates
- Prevailing market rental rates
- Tenant quality and replacement cost