In 2020, positive contributors to relative performance included overweight allocations to the cell tower and data center sectors, along with stock selection in the residential sector. Stock selection in the office sector, along with an underweight allocation to the self storage sector and an overweight allocation to the diversified sector detracted from relative performance.
Positive contributors to relative performance included stock selection in the industrial, shopping center, and self storage sectors. Stock selection in the triple net sector, as well as an overweight to the cell tower sector and an underweight to the healthcare sector detracted from relative performance.
In the January 2021 REIT Outlook titled, “The 2021 Chilton REIT Forecast,” we present our total return forecast of +14% to +19%, review what happened with REIT performance in 2021, and describe how we managed the portfolio during the pandemic. Despite the disappointing total return in 2020 relative to our initial forecast, we are proud that our portfolio positioning and subsequent management was able to produce almost 500 bps of outperformance versus the benchmark. We attribute the outperformance to the massive divergence in performance between REIT securities, which gives active managers such as ourselves a wider set of opportunities to outperform a passive index. We believe this bifurcation will continue into 2021, backed by the tailwinds of broader industry recovery in cash flow, which will only further justify the need for an active REIT allocation in all investor portfolios.
Previous editions of the Chilton Capital REIT Outlook are available at www.chiltoncapital.com/category/library/reit-outlook/.
An investment cannot be made directly in an index. The funds consist of securities which vary significantly from those in the benchmark indexes listed above and performance calculation methods may not be entirely comparable. Accordingly, comparing results shown to those of such indexes may be of limited use.
The information contained herein should be considered to be current only as of the date indicated, and we do not undertake any obligation to update the information contained herein in light of later circumstances or events. This publication may contain forward looking statements and projections that are based on the current beliefs and assumptions of Chilton Capital Management and on information currently available that we believe to be reasonable, however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements. This communication is provided for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any Chilton investment or any other security.
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