@article {Fairchild51, author = {Simon Fairchild and Greg MacKinnon and John Rodrigues}, title = {Are All Open-End Core Funds Created Equal?}, volume = {37}, number = {5}, pages = {51--67}, year = {2011}, doi = {10.3905/jpm.2011.37.5.051}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Open-end core real estate funds (OECFs) are an important component of the institutional property markets, but have received scant attention in the research literature. Fairchild, MacKinnon, and Rodrigues examine a sample of OECFs to determine if their underlying portfolios are consistent with common definitions of {\textquotedblleft}core{\textquotedblright} and to what extent core funds provide beta exposure to the market. Generally, OECFs appear to hold core-type portfolios, but this is not universal. In particular, smaller funds tend to be less diversified and have higher idiosyncratic volatility. Many OECFs have a surprisingly large exposure to development projects. The authors find that leverage also plays a key role in an analysis of OECFs. While most OECF returns are driven by the broad market, OECFs are usually an aggressive play on the market, with each fund{\textquoteright}s aggressiveness determined by its leverage. Further, although the authors find evidence of persistence in OECF returns, a closer look reveals that this may be due to funds varying their capital structure over time. Overall, while most OECFs appear driven by similar factors, not all are created equal; investors should conduct careful due diligence on their OECF investments, with special attention to fund size and leverage.TOPICS: Real estate, equity portfolio management, mutual fund performance}, issn = {0095-4918}, URL = {https://jpm.pm-research.com/content/37/5/51}, eprint = {https://jpm.pm-research.com/content/37/5/51.full.pdf}, journal = {The Journal of Portfolio Management} }