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Do real estate funds in general have a high turnover rate? Also, is there a place one can research prior years to check the turnover rates for those years?
I don't think it's necessarily a thing (nor do I see why it necessarily has to be, I mean, pick great REITs and there shouldn't be a need to have a giant turnover. I'm seeing around 20-40% when I looked at a few random ones.)
Hmm. The fund in question is one I own. ARYVX. It has done very well but looking at it recently I noticed it had 275% turnover. Maybe this was a one year thing? That is why I wondered where I could get previous years turnover rates.
I suspect (but am too lazy to check) that historical turnover rates are available in a fund's annual report...
A general observation: I find it peculiar that individual investors are incessantly told to 'buy and hold' and 'don't time the market', while many actively-invested, professionally-managed OEFs have +100% turnover rates... These would seem to be contradictory behaviors. Just an observation.
One of our real estate holdings for the past several years is FRIFX. It is an odd duck fund for the other RE in its category; as it averages about 50/50 equity and bond mix. The fund turnover runs about 30; among 570 or so holdings as of the most recent report period.
For turnover rate/ratio with a fund; the understood measure method covers a 12 month period. According to statistics, the average managed mutual fund turnover is 85%.
A turnover event "count" occurs when a stock is sold before being held for 1 year. I will presume, without further investigation; that a turnover count does not happen if the stock is sold at a holding period of 1 year and 1 day from purchase date.
Obviously, turnover, as a ratio; is also affected by the number of holdings in a fund.
I/we at our house; are not concerned with turnover numbers.......if the fund functions in a manner as we anticipated and/or understood to begin; and continues in a positve direction.
@ FREDX doesn't yield quite that of FRIFX; however when it comes to performance it's far superior. FRIFX YTD-10 yrs. has ranked in the 85-98% percentile which qualifies it as a turkey. Regards, Ted
@Ted Yes, FRIFX is a tame one in the real estate arena. Hell, it is listed as a 3 alarm fire fund here in Charles' list; because it is matched against pure real estate equity funds. M* does not have a category for this type of fund; so it shows up at the bottom of the list and always will.
As noted, the fund is usually 1/2 bonds. I don't know of any other funds in this sector with a similar function.
But, the annualized 5 year return is 11%, so no bitch'in from this house for this part of the mix.
For the time being, we'll keep it packed in with other RE, healthcare and broadbased U.S. equity.
With a remaining conviction that real estate will maintain forward momentum, as long as interest rates don't become upward crazy too fast or some other strange event; the next likely candidate for shuffling real estate holdings would be directed at FSRVX.
This would maintain our 50% portfolio in equity to about the following mix for total equity portfolio: --- 50% broadbased U.S., VTI (mostly larger cap) --- 35% healthcare, split between PRHSX and FSPHX --- 15% real estate, DPRRX and BIREX (access to these 2 will be lost with consolidation)
DPRRX is too expensive to own anyway.
Hey, stay warm and careful, man. Will be even more brutal in Michigan tonight and Sunday. We've had just 3 more inches of snow, but the wind gusts are +25mph and going higher are causing many roads to become drifting/crap again. Wind chills for tonight reported to be -30 and lower. I know it is nasty in your area, too.
Glad to be a positive side investor, so that the market place profits will pay the heat bill.
Take care, and thank you for your thoughts with this.
ARYVX annual report shows 2014 turnover as 275%, 2013 as 392%, and 2012 as 264%. That suggests a lot of trading and explains the large distributions. I'm not sure what to make of this.
Thanks for looking that up @BenWP. I haven't had a chance to check it out. I did however zip off a email to American Century regarding this question. When I get the response I will report back here. Since it is the holiday weekend I'm not sure how long that will be. Usually they are very quick since I have one person assigned to me to handle all my business.
That's a heck of a lot of trading for a real estate fund. Some sort of "dividend capture" strategy? Although I mean, even Alpine Global Property (AWP), which I'm pretty sure does use a dividend capture strategy, has a 58% turnover.
Do real estate funds in general have a high turnover rate? Also, is there a place one can research prior years to check the turnover rates for those years?
I don't think index funds have high turnover. Good reason to own them, like VNQ.
I recieved an email back from American Century. In short, the reason given for the high turnover was that 1: this is a new fund (3 years), 2: the assets are only $73million, and 3: the combination of those two facts lends to high turnover as the fund is trying to get on the advisors radars.
I would figure a lot of buying is involved but is that construed as turnover? I thought turnover was a buy and sell step. The email gave me half an answer which is disappointing. I still plan to hold the fund as it has done very well. It has 5 stars from the big M.
I suspect they didn't want to get too detailed in their explanation so I could understand better.
Comments
A general observation: I find it peculiar that individual investors are incessantly told to 'buy and hold' and 'don't time the market', while many actively-invested, professionally-managed OEFs have +100% turnover rates... These would seem to be contradictory behaviors. Just an observation.
The fund turnover runs about 30; among 570 or so holdings as of the most recent report period.
Fido summury view of this fund
For turnover rate/ratio with a fund; the understood measure method covers a 12 month period. According to statistics, the average managed mutual fund turnover is 85%.
A turnover event "count" occurs when a stock is sold before being held for 1 year. I will presume, without further investigation; that a turnover count does not happen if the stock is sold at a holding period of 1 year and 1 day from purchase date.
Obviously, turnover, as a ratio; is also affected by the number of holdings in a fund.
I/we at our house; are not concerned with turnover numbers.......if the fund functions in a manner as we anticipated and/or understood to begin; and continues in a positve direction.
Regards,
Catch
Regards,
Ted
Yes, FRIFX is a tame one in the real estate arena. Hell, it is listed as a 3 alarm fire fund here in Charles' list; because it is matched against pure real estate equity funds.
M* does not have a category for this type of fund; so it shows up at the bottom of the list and always will.
As noted, the fund is usually 1/2 bonds. I don't know of any other funds in this sector with a similar function.
But, the annualized 5 year return is 11%, so no bitch'in from this house for this part of the mix.
For the time being, we'll keep it packed in with other RE, healthcare and broadbased U.S. equity.
Regards,
Ted
FRIFX vs. FREDX:
http://www.marketwatch.com/tools/mutual-fund/compare?Tickers=FREDX+FRIFX&Compare=Returns
Accounts are being consolidated here.
With a remaining conviction that real estate will maintain forward momentum, as long as interest rates don't become upward crazy too fast or some other strange event; the next likely candidate for shuffling real estate holdings would be directed at FSRVX.
This would maintain our 50% portfolio in equity to about the following mix for total equity portfolio:
--- 50% broadbased U.S., VTI (mostly larger cap)
--- 35% healthcare, split between PRHSX and FSPHX
--- 15% real estate, DPRRX and BIREX (access to these 2 will be lost with consolidation)
DPRRX is too expensive to own anyway.
Hey, stay warm and careful, man. Will be even more brutal in Michigan tonight and Sunday. We've had just 3 more inches of snow, but the wind gusts are +25mph and going higher are causing many roads to become drifting/crap again. Wind chills for tonight reported to be -30 and lower. I know it is nasty in your area, too.
Glad to be a positive side investor, so that the market place profits will pay the heat bill.
Take care, and thank you for your thoughts with this.
Regards,
Catch
I would figure a lot of buying is involved but is that construed as turnover? I thought turnover was a buy and sell step. The email gave me half an answer which is disappointing. I still plan to hold the fund as it has done very well. It has 5 stars from the big M.
I suspect they didn't want to get too detailed in their explanation so I could understand better.