3 ms·

> Seeing real estate as a stand-alone sector in an index could also drive more money to REITs. I'm going to be very interested to see how this reclassification

by haney 10y ago

> Seeing real estate as a stand-alone sector in an index could also drive more money to REITs. I'm going to be very interested to see how this reclassification impacts the price of REITs. I'd imagine that capital inflows are going to cause a spike in prices.

akg_67 10y ago
In the short term, capital outflow from selling of REITs by Financial Index Funds will depress the REIT prices. Financial Index Funds have much more capital invested in them than that in the REIT index Funds. Any REIT selling by Financial Index Funds will have bigger impact than any REIT purchasing by REIT Index Funds. Come tax time, lots of investors in Financial Index Fund will be in for the surprise, a larger capital gains unless Financial Index Funds decide to spin off REIT holdings as a separate REIT Index Fund instead of selling REIT holdings.
- REBurner 10y ago
  Real estate professional here, investing in listed and non-listed. Few ETFs will have to adapt to this change, but those that will have had a long time to figure out the most tax efficient way of doing so. While they are passive managers, they still have incentives to help their investors with structure. The new GICS sector could bring some new attention to the sector. This probably will affect small cap more than large cap as the generalists take a broader look at the sector. Many have invested in the large caps for a while just to have some exposure. There have been rumors that general stock managers have underweighted the sector overall as it was a part of their 'financial' bucket, but unlike the traditional financial stocks. However, I wouldn't expect money rushing in or out. If there is any price drop over the next couple weeks I would expect it is due to expectations around the Fed rather than ETFs selling.

3 ms·

> Seeing real estate as a stand-alone sector in an index could also drive more money to REITs. I'm going to be very interested to see how this reclassification

by haney 10y ago

akg_67 10y ago
In the short term, capital outflow from selling of REITs by Financial Index Funds will depress the REIT prices. Financial Index Funds have much more capital invested in them than that in the REIT index Funds. Any REIT selling by Financial Index Funds will have bigger impact than any REIT purchasing by REIT Index Funds. Come tax time, lots of investors in Financial Index Fund will be in for the surprise, a larger capital gains unless Financial Index Funds decide to spin off REIT holdings as a separate REIT Index Fund instead of selling REIT holdings.
- REBurner 10y ago
  Real estate professional here, investing in listed and non-listed. Few ETFs will have to adapt to this change, but those that will have had a long time to figure out the most tax efficient way of doing so. While they are passive managers, they still have incentives to help their investors with structure. The new GICS sector could bring some new attention to the sector. This probably will affect small cap more than large cap as the generalists take a broader look at the sector. Many have invested in the large caps for a while just to have some exposure. There have been rumors that general stock managers have underweighted the sector overall as it was a part of their 'financial' bucket, but unlike the traditional financial stocks. However, I wouldn't expect money rushing in or out. If there is any price drop over the next couple weeks I would expect it is due to expectations around the Fed rather than ETFs selling.