Active managers increase allocations in specialty, telecommunications, gaming

During the fourth quarter of 2023, active managers increased allocations in telecommunications, gaming and specialty, bringing all three property sectors’ asset shares close to their FTSE Nareit All Equity REITs index weights. The data is based on Nareit's analysis of quarterly investment holdings for the 27 largest actively managed real estate investment funds that focus on investing in REITs. All three property sector shares were up quarter-over-quarter and year-over-year. These gains have put all three less than half a percentage point below their index weights, mitigating their historical underweighting.

In terms of returns, active managers’ increase in specialty in the third quarter of 2023 by 0.1 percentage point matched the sector, outperforming the index by 4.5 percentage points in the fourth quarter. Funds have been cutting their share of residential i