The answer is at least these five active managers within the real estate space. This is the top and largest holding for the managers listed below.

  • American Century Investments Real Estate Fund
  • Aston-Harrison Real Estate Fund
  • Cohen and Steers Real Estate Fund
  • Eaton Vance Real Estate Fund
  • DWS-RREEF Real Estate Fund

            Simon Property Group, Inc.( Simon Property), is a self-administered and self-managed real estate investment trust (REIT). The Company owns, develops and manages retail real estate properties, which consist primarily of malls, Premium Outlets, The Mills, and community/lifestyle centers.

            It has been a flat performer for the last year so all these five active managers who should be finding potentially outperforming REITS, hold this under performing REIT in eerily close portion to that of the following ETFs.

  • iShares Cohen & Steers REIT ETF
  • iShares U.S. Real Estate ETF
  • iShares Real Estate 50 ETF
  • Schwab US REIT ETF
  • SPDR Dow Jones REIT ETF

            They ALL have as their top holding Simon Properties. Zenith does not have anything analytically against Simon Properties but wonder why these managers all make it their top holding. It makes sense for the ETF world to look similar as they are constructed around a benchmark; however while mutual funds need to state a benchmark they don’t have to hug it. They can seek more unique and less crowded ideas to add value to the portfolio. 

            While there are differences in a few names at the meaningful percentage level as well as the weighting at the security and sector level, they all are very REIT benchmark focused for the most part.

 

       This is just a short pre-holiday snippet to get you thinking about your managers uniqueness or if they simply buy what most in their space are holding. We will apply much more definitive analytical firepower to pick apart these managers and to issue official sell recommendations in Dec and into the New Year where they are warranted. Why pay for Simon Properties with these managers when you can simply buy an ETF?

Sincerely,

Tom Koehler-CIO

 

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