Here’s a dumb question; what’s the difference between a value weighted and cap weighted index? NCREIF is value weighted NAREIT is cap weighted Isn’t value weighted and cap weighted almost same? Is it just NAREIT use REITS which are trade-able?
Pretty sure it is the same thing.
Might just be semantic. Cap weighted implies shares, but if you aren’t publicly traded you might not have have shares. End result should be the same.
hmm. my thinking is same… just don’t understand why schweser makes a distinction in page 117 of book 4.
Under the weighting schemes for indexes, cap weighted and value weighted are used interchangeably I think.
Yes, that’s what I recall. I occasionally get confused when I hear “value weighted,” because it sounds like something related to the growth-value dimension, but it means the same as cap-weighted.
http://www.ncreif.com/faqs/index.phtml# http://www.nareit.com/portfoliomag/03novdec/professional.shtml http://www.bailard.com/pdf/Public%20vs%20Private%20Real%20Estate_.pdf all you need to know about RE…
NREIT is listed securities (i.e. indirect investments) so its mkt cap weighted. NREIF is benchmark for privately held direct investments…so there is no market cap as such… Therefore you weight it according to value of properties… Edit: It should be NAREIT instead of NREIT. And NCREIF instead of NREIF…
You may be confusing market weighted with float weighted.