Global Real Estate Index
as of June 30, 2014
Fund Commentary
The FTSE® EPRA®/NAREIT® Global Index returned 6.90% during the second quarter of 2014. Real estate securities outperformed the broader equity market, as measured by the MSCI ACWI® Index, which returned 5.04%. The Global Real Estate Index Fund posted a return of 6.96% for the quarter.

Developed market real estate outpaced emerging market real estate during the second quarter. U.S. real estate companies returned 6.96% and developed market real estate companies outside of the U.S. returned 8.57%, while emerging market real estate lagged with a return of 0.96%.

Global equities provided positive returns in the quarter, driven by positive global economic growth indicators and continued accommodative monetary policy from a range of central banks. The market shrugged off mounting geopolitical risks, including continued instability in Ukraine and the rise of the Islamic State of Iraq and the Levant (ISIS), instead appearing to focus on positive signals from the corporate sector and the global economy in general. Global growth appeared to accelerate during the period after a dismal first quarter resulting partly from an unusually harsh U.S. winter. An increase in U.S. merger and acquisition activity contributed to investor optimism, and upward earnings revisions further boosted the markets. Despite the increased optimism and positive economic results, central banks remained dovish. The U.S. Federal Reserve maintained its near-zero short-term rate policy and measured pace of bond purchase tapering, while the European Central Bank went further by introducing a negative deposit rate.
Investor Profile
  • Seek to duplicate the investment composition and overall performance of the stocks included in the FTSE®EPRA®/NAREIT® Global Index.
  • Invest at least 80% of its net assets in equity securities in the Index, in weightings that approximate the relative composition of the Index.
  • Use proprietary quantitative techniques designed to minimize trading costs.
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