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Interpretting REIT Returns

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    Interpretting REIT Returns

    I'm trying to compare annual returns from stocks, bonds, commodities, t-bills, and REITs, but I'm running into a problem on interpreting REIT performance.

    Suppose you are only looking at the fund on the far left of this chart.
    Does Return(%) for either Total or Price indicate the annual return on investment, without taxes?

    http://returns.reit.com/returns/AnnualReturns.xls

    I would have thought it was return, but those numbers seem far too big. The average is 11.5 over 40 years, 4.5% higher than the S&P. I'd then think it was Price (2.5% over 40 years), but I'm not sure. Isn't price the price of the fund, without mention of dividends paid?
    Last edited by Relmiw; 10-25-2012, 01:17 PM.

    #2
    Originally posted by Relmiw View Post
    I would have thought it was return, but those numbers seem far too big. The average is 11.5 over 40 years, 4.5% higher than the S&P.
    That number sounds about right. My REIT fund (CSRSX) has a since inception (7/2/91) average annual return of 12.28% vs. 8.73% for the S&P 500 and 11.50% for the FTSE NAREIT Equity REIT Index.

    Of course, I have no idea why one would compare the performance of a REIT to the S&P 500 as they are totally different asset classes, but there it is.
    Steve

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      #3
      Originally posted by disneysteve View Post
      That number sounds about right. My REIT fund (CSRSX) has a since inception (7/2/91) average annual return of 12.28% vs. 8.73% for the S&P 500 and 11.50% for the FTSE NAREIT Equity REIT Index.

      Of course, I have no idea why one would compare the performance of a REIT to the S&P 500 as they are totally different asset classes, but there it is.
      I think part of it was that I'd forgotten to adjust the REIT reports for inflation. The other data sources had done so automatically. Adjusting each year for inflation, it's brought to

      S&P: 8.7%
      REIT: 9.4%
      Commodities: 8.6%
      Bonds: 6.3%
      T-Bills: 1.5%
      Dow Utility: 6.7%

      I expected the large cap stocks to reign supreme. I've always heard REITs barely keep up with inflation. It's very surprising to me and making me question my data. I'd like to look at this over a longer time period, but I can only find Commodity and REIT info back to 1975.

      Disneysteve, my purpose is to examine performance and correlation across asset classes.

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