ICF: Not As Attractive As The CEFs From Cohen & Steers

seekingalpha04-24

iShares Cohen & Steers REIT ETF is a fixed-income exchange-traded fund. The vehicle focuses on REIT equity and has a passive investment approach.The fund tracks the Cohen & Steers Realty Majors Index,...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2429170367?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1488294044/image_1488294044.jpg","is_english":true,"pubTime":"2024-04-24 11:31","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2429170367","market":"fut","top_or_hot":-1,"title":"ICF: Not As Attractive As The CEFs From Cohen & Steers","media":"seekingalpha","content":"<div>\n<p>iShares Cohen & Steers REIT ETF is a fixed-income exchange-traded fund. The vehicle focuses on REIT equity and has a passive investment approach.The fund tracks the Cohen & Steers Realty Majors Index,...</p>\n\n<a href=\"https://seekingalpha.com/article/4685519-icf-etf-not-as-attractive-as-the-cefs-from-cohen-and-steers\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ICF: Not As Attractive As The CEFs From Cohen & Steers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nICF: Not As Attractive As The CEFs From Cohen & Steers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-24 11:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4685519-icf-etf-not-as-attractive-as-the-cefs-from-cohen-and-steers><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>iShares Cohen & Steers REIT ETF is a fixed-income exchange-traded fund. The vehicle focuses on REIT equity and has a passive investment approach.The fund tracks the Cohen & Steers Realty Majors Index,...</p>\n\n<a href=\"https://seekingalpha.com/article/4685519-icf-etf-not-as-attractive-as-the-cefs-from-cohen-and-steers\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4529","symbol_name":"IDC概念","start_time":0,"source_url":"https://seekingalpha.com/article/4685519-icf-etf-not-as-attractive-as-the-cefs-from-cohen-and-steers","article_id":"2429170367","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1488294044/image_1488294044.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429170367","pubTimestamp":1713929506,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"iShares Cohen & Steers REIT ETF is a fixed-income exchange-traded fund. The vehicle focuses on REIT equity and has a passive investment approach.The fund tracks the Cohen & Steers Realty Majors Index,","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4529":"IDC概念","RFI":"Cohen & Steers Total Return Real","BK4224":"工业房地产信托","FDN":"First Trust Dow Jones Internet I","BK4554":"元宇宙及AR概念","PLD":"安博","AMT":"美国电塔","BK4567":"ESG概念","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","BK7007":"医疗保健设备","AMT.AU":"ALLEGRA MEDICAL TECHNOLOGIES","VNQ":"不动产信托指数ETF-Vanguard","BK4566":"资本集团","XLRE":"Real Estate Select Sector SPDR Fund","BK4222":"数据中心房地产信托","BK4588":"碎股","BK4550":"红杉资本持仓","ICF":"不动产指数ETF-iShares","BK4084":"特种房地产投资信托","CFA.SI":"NikkoAM-STC Asia REIT","BK7501":"新冠治疗股","BK4581":"高盛持仓","EQIX":"易昆尼克斯","BK4171":"工业房地产投资信托","BK4219":"电信塔房地产信托"},"translate_title":"ICF：没有Cohen&Steers的CEFs有吸引力","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PLD":1,"XLRE":1,"VNQ":1,"RFI":1,"AMT":1,"ICF":1,"EQIX":1,"AMT.AU":1,"FDN":0.9,"CFA.SI":0.9,"US12M.BOND":0.64,"US7Y.BOND":0.64,"US6M.BOND":0.64,"US5Y.BOND":0.64,"US3Y.BOND":0.64,"US30Y.BOND":0.64,"US2Y.BOND":0.64,"US10Y.BOND":0.64,"US912797HH31.BOND":0.6,"US912797HG57.BOND":0.6,"US912797HE00.BOND":0.6,"US912797GW17.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GB79.BOND":0.6,"US912797FS14.BOND":0.6,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6},"content_text":"iShares Cohen & Steers REIT ETF is a fixed-income exchange-traded fund. The vehicle focuses on REIT equity and has a passive investment approach.The fund tracks the Cohen & Steers Realty Majors Index, meaning it holds the same assets as the index and doesn't try to outperform it through active management.REITs have been negatively impacted by rising interest rates in 2024. ICF's performance reflects this, with a total return down over 8% year-to-date.The article argues that active management is preferable in a tough market like today's, and points to RFI's outperformance as an example.pcess609 Thesis The iShares Cohen & Steers REIT ETF (BATS:ICF) is a fixed income exchange-traded fund. The vehicle focuses on REIT equity, and has a passive investment approach. The fund comes from BlackRock, but via its build benefits from the Cohen & Steers expertise in the space, aiming to follow the Cohen & Steers Realty Majors Index. We find ICF very interesting because it brings to light the difference between active and passive investing. We have covered the Cohen & Steers Total Return Realty Fund (RFI) here, a fund which is a non-leveraged CEF, but with active management from Cohen. After the very poor performance experienced so far by REITs in 2024, we are going to go through the ICF composition and its merits versus a cohort of its peers. Lines are blurred when CEFs do not have leverage One of the advantages of the CEF structure is its ability to undertake leverage in the underlying asset class. ETFs do not have this ability given their build and legal structure. Furthermore, many ETFs are passive investment vehicles following an index. ICF falls in this category. Given the common manager, one could think ICF and RFI would have very similar results. The reality is different long term: Data by YCharts On a 5-year look-back, RFI outperforms by a factor of 3x when total return figures are computed. The chart highlights the benefits of active management versus passive index composition for the space. ETF composition The ETF contains a multi-sector portfolio of REIT equities: Sectoral Composition (Fund Website) Office REITs, which are a very challenged sub-sector of the market, represent only 4.05% of the portfolio here. The ETF's top holdings are well-known REIT names which can be found in RFI and other peers in the REIT equity ETF space: Top Holdings (Fund Website) Equinix (EQIX) represents 7.57% of the fund, followed by American Tower REIT (AMT) at 7.55% and Prologis (PLD) at 6.8%. REIT equity has been pummeled in 2024 on the back of higher rates The resurgence of inflationary pressures has forced the Fed to delay its first-rate cut. While the market came into 2024 pricing in six rate cuts, it is now down to only one. A higher rates environment has been detrimental to the REIT asset class, which is known for its high yields: Data by YCharts Most REIT equity funds are down over -8% in 2024, with only RFI having a better performance than the cohort. We can notice how closely correlated are the performances for ICF, the Vanguard Real Estate ETF (VNQ) and the Real Estate Select Sector SPDR (XLRE) ETFs. Not only do they have almost the same total return in 2024, but their daily moves are almost identical. Again, it comes down to passive investment approaches using ETFs which follow an index. If inflation stabilizes here and resumes its downward trajectory, the market will again start pulling forward rate cuts, which in turn will translate into a positive performance for the REIT asset class. We are of the opinion that the downside is limited here for the likes of ICF given the fact that we do not think the Fed will hike again, even if CPI figures come in higher than expected. We are in a presidential election year, and while it can be politically palatable to just leave rates high, it is almost unfathomable to imagine the implications of a rate hike. The beauty of active management is that it allows portfolio managers to buy and sell names constantly, whereas index builders are constrained by the rebalancing dates. A nimble, active portfolio management is much more preferable in a tough market like today's. We are not in a REIT bull market, but in a multi-year bottoming one, where we are nearing the end. In a sustained bull, the differential in performance is lower, and leverage starts making a difference. Once rates stabilize or resume a lower path, we should see a positive performance in the asset class. Make no mistake about it, however, we are now trading at decade lows in the REIT equity asset class due to the higher rates environment we are experiencing. A long-term chart for ICF tells that story: Data by YCharts A 10-year price chart for the ETF shows that we are nearing the long-term support level for the fund at $48/share, a historic low for the name. While the zero rates environment in 2020/2021 facilitated a significant rally in the share prices, the higher for longer rates environment in today's market has moved the needle down in terms of values. Analytics  AUM: $1.9 billion. Sharpe Ratio: 0.08 (3Y). Std. Deviation: 21.6 (3Y). Yield: 2.75%. Premium/Discount to NAV: n/a. Z-Stat: n/a. Leverage Ratio: 0%. Expense Ratio: 0.33% Composition: Equities / REIT Equity  What should ICF investors do? Despite the poor performance in 2024 driven by higher rates, the ETF is nearing a decade low, which has acted as support many times in the past. There is an inverse relationship between rates and REIT equity valuation, and we are currently reaching an extreme, after six rate cuts were priced out by the market this year. ICF investors should continue to hold the name longer term, since there is significant upside once the Fed starts cutting rates. New money, however, should realize that ICF does not benefit from an active management approach, even if it has the Cohen name slapped on it. In today's rough market, active management has proven to be superior, with RFI, the unleveraged CEF from Cohen being an outperformer. To that end, new capital allocations should be made, in our opinion, toward actively managed names in today's environment. Conclusion  ICF is an exchange-traded fund focused on REIT equity. The vehicle comes from BlackRock, but aims to follow an index managed by Cohen & Steers. The fund has had a performance similar to VNQ and XLRE in 2024, with only RFI, the actively managed CEF from Cohen, outperforming. Active management has proven to be key in today's market, where rates have moved higher again on the back of a sticky inflation picture. ICF is nearing decade lows, which have proven to be good support levels in the past, and represents a name to hold at these levels. New money, however, would do well to look at actively managed funds like RFI in today's market.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429170367"}