During fourth quarter 2023, active REIT managers increased allocations to 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 focused on investing in REITs. The shares of all three property sectors 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.

Regarding returns, active managers’ increase in specialty in the third quarter of 2023 by 0.1 percentage points matched the sector, outperforming the index by 4.5 percentage points in the fourth quarter. Funds have been cutting their share of residential in recent quarters, and the sector strongly underperformed the All Equity index in the fourth quarter. Residen