Global Real Estate Index
as of December 31, 2013
Fund Commentary
The FTSE® EPRA®/NAREIT® Global Index returned -1.25% during the fourth quarter of 2013. The Global Real Estate Index Fund posted a return of -1.00% for the same period. Real estate securities underperformed the broader equity market, as measured by the MSCI ACWI® Index, which returned 7.31%.

The -0.69% return for U.S. real estate securities underperformed the -0.32% return for developed market international real estate securities. Emerging market real estate securities underperformed developed markets, with a return of -6.17%.

The Federal Reserve announcement in December that it would begin to taper its asset purchase program in January contributed to monetary tightening fears and relatively poor global real estate performance. By contrast, U.S. equities ended the year with another strong quarter, partly driven by positive market reaction to monetary and fiscal policy activity in Washington. The Fed's assurance of continued monetary stimulus boosted U.S. equities at the start of the fourth quarter. This positive performance was sustained through October despite a fiscal stalemate and a government shutdown. A temporary budget deal was reached late in October, and a longer-term budget agreement was reached in December, reducing fiscal uncertainty. Janet Yellen was nominated as the next Fed Chair, and her testimony before Congress assured markets that policy would remain appropriately accommodative.
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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