Barclays launches Colony Capital Fundamental US Real Estate Index
Barclays has launched the Colony Capital Fundamental US Real Estate Index, designed with Colony Capital (Colony), a global investment management firm.
The central premise of the Index is that avoidance of risk is the primary driver of long-term outperformance in commercial real estate.
The Index is designed to eliminate the riskiest REITs by focusing on characteristics that Colony views to be reliable markers of risk and screening out REITs that exhibit these characteristics. Under its methodology, the Index selects at least 25 constituents, with the index rebalancing each quarter. The Index excludes mortgage REITs.
“We are very excited to be partnering with Colony to deliver an innovative, fundamentals-focused Index to our clients,” says Todd Sandoz, Head of Equities, Americas. “The Index draws on Colony’s 27 years of experience in managing global real estate investments coupled with Barclays’ market leading strengths in the structuring, trading and distribution of indices.”
“There has been significant innovation in the smart beta space offering traditional equity factor exposure, but much less in the REITs segment,” says Fabien Labouret, Global Head of Equities Structuring. “This particular Index leverages Colony’s expertise and is designed to appeal to investors seeking high quality REIT exposure.”
“Colony applies time-tested, fundamental real estate investing principles, with a focus on risk mitigation, to derive a differentiated REIT index,” says Bill Hughes, Portfolio Manager and Head of Liquid Strategies, Colony Capital. “We are excited to be partnering with Barclays, and their world-class index platform, to bring this innovative new investment strategy to market.”
Barclays Bank PLC owns the Index and licensing rights related to the Index. Barclays Index Administration, a distinct function within the investment bank of Barclays Bank PLC, performs the role of index sponsor and administers the Index.