The iShares Cohen & Steers REIT ETF (ICF) has given a total return of 4.9% to its investors. The smart beta fund’s index, the Cohen & Steers Realty Majors Index, manages a portfolio of 30 realty stocks.
The above chart compares the market performance of a combined portfolio of 20% ICF and 80% S&P 500 (or SPY) with the market S&P 500 itself. As can be seen in the chart, the combined portfolio has underperformed in the market, though it has reduced the overall volatility of the market.
The year-to-date (or YTD) return of the combined portfolio comes out to be 3.2%, lower than SPY’s YTD return of 3.3%.
Thematic funds invest their total assets in companies in one particular type of sector. These types of funds are some of the least-diversified funds that are available in the market.
ICF tracks the performance of the realty subsector through the average performances of its holdings, and it contains some of the top-performing REIT stocks in its portfolio.
Thematic funds are also the riskiest and should therefore be invested in after thorough research and understanding.