In August, the MSCI US REIT Index (RMZ) produced a total return of -6.0%. The Chilton REIT Composite outperformed the benchmark for the month by producing a total return of -5.7%, both gross and net of fees. Year to date, the Chilton REIT Composite has outperformed the RMZ by producing a total return of -15.9% gross of fees and -16.3% net of fees, which compares to the RMZ total return of -18.3%.
Positive contributors to relative performance included an underweight to the office sector, an overweight to the cell tower sector, and stock selection within the industrial sector. Conversely, stock selection within the healthcare and shopping center sectors, and an underweight to the specialty sector detracted from relative performance.
Year to Date (YTD) Attribution
Year to date, positive contributors to relative performance included stock selection within the healthcare sector, an underweight to the office sector, and an underweight to the regional malls sector. Underweight allocations to the triple net, hotel, and specialty sectors detracted from relative performance.
YTD Contributors Summary
YTD Detractors Summary
In the September 2022 REIT Outlook titled, “All Yield is Not Created Equal,” we showcase the dangers of high yield investments, especially those that seem too good to be true. While investors tend to be attracted to high yield, low yield has actually consistently outperformed. Unfortunately, investment managers continue to use high yield to attract capital to this day, and we encourage investors to be especially diligent when considering such an investment. The Chilton process of focusing on risk-adjusted total returns has produced 285 basis points of annualized outperformance for 17 years gross of fees (200 bps net of fees) with less risk and lower volatility than the RMZ.
The information contained herein should be considered to be current only as of the date indicated, and we do not undertake any obligation to update the information contained herein in light of later circumstances or events. This publication may contain forward looking statements and projections that are based on the current beliefs and assumptions of Chilton Capital Management and on information currently available that we believe to be reasonable, however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements. This communication is provided for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any Chilton Capital Management investment or any other security.
Past performance is not indicative of future results. Investment returns and principal value will fluctuate so that an investor’s account, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.
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