What an asset is price depends upon who owns it—and the way.
In the event you personal publicly traded real-estate investment trusts, your REITs are worth an average of 21% less than they have been on the finish of 2019. If, nevertheless, you maintain the TIAA Actual Property Account, a $25.2 billion variable annuity invested largely in personal belongings, your stake is down only one.1% for the yr.
These variations spotlight the hole between how private and non-private markets work. The frequent fund abbreviation NAV, which stands for “internet asset worth,” in actuality typically signifies “close to asset worth.” That may be the case whenever a fund owns nontraded assets—not simply personal actual property, however personal fairness, enterprise capital and no matter else doesn’t have a day by day market worth.
Look what occurred on March 16, when markets went into meltdown and REITs have been wrecked. But the TIAA Actual Property Account dropped solely 0.7%. That’s largely as a result of most of its properties don’t commerce. That very same day, TIAA-CREF Actual Property Securities, provided by the identical agency however investing primarily in public REITs, misplaced 17.7%.
TIAA affords the Actual Property Account solely in retirement financial savings plans for lecturers and different not-for-profit staff. The Actual Property Securities fund is offered to most people.