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Index IDEA: UK-listed real estate stocks change course post-Brexit announcement

The value of the FTSE EPRA / NAREIT UK Index, designed to represent the performance of eligible real estate companies and REITs listed on the London Stock Exchange, has risen over the last six months, indicating a rise in UK-listed real estate stocks in the “post-Brexit” era after a sharp decrease on “Brexit day.”

Leading up to the June 24, 2016 referendum announcement declaring the UK’s intent to exit the European Union, the FTSE EPRA/NAREIT UK Index declined 4.9% in net euro terms (a decline of 1.1% in GBP terms). On June 24, the index declined an additional 19.3% (14% in GBP). However, from June 25, 2016 through February 15, the index rose by 3.0% (7.2% in GBP).

Catherine Yoshimoto, senior index product manager, FTSE Russell, said:

“The performance of the FTSE EPRA/NAREIT UK Index demonstrates the importance of being able to segment the broader index by, for example, region or country, particularly during periods of heightened volatility. Analyzing index performance before and after the Brexit shock shows the clear change in course for UK-listed real estate stocks in the past six months.”

 

Isabelle Bourcier, Head of ETF & Index Solutions, THEAM – BNP Paribas, said:

“Performance of the FTSE EPRA/NAREIT UK Index in 2016 and 2017 to-date helps to illustrate the sensitivity of UK-listed real estate stocks to broader political, market and economic trends at work in the UK. And investors seeking exposure to listed real estate stocks in Europe have chosen ETFs based on indexes that track listed real-estate stocks in various European markets as tools for strategic and tactical asset allocation.”


The FTSE EPRA/NAREIT Global Real Estate Index Series was developed in partnership with the European Public Real Estate Assocation (EPRA), a pan-European common interest group, and the National Association of Real Estate Investment Trusts® (NAREIT), a US-focused organization. The Series underlies ETFs offered in Europe by BNP Paribas.

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Views expressed by Catherine Yoshimoto of FTSE Russell and Isabelle Bourcier of BNP Paribas are as of February 28th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.

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