Skip to Content
US Videos

A Real Estate Fund With Less Interest-Rate Risk

Gold-rated Third Avenue Real Estate Value treads lightly in REITs and, therefore, has less interest-rate sensitivity than its peers.

Mentioned:

Leo Acheson: Third Avenue Real Estate Value (TAREX) is not your typical real estate fund. It differs from the competition in a number of ways. While many of its competitors focus on delivering income and, therefore, invest heavily in REITs, this fund focuses more on capital appreciation and tends to tread lightly in REITs. In fact, REITs currently make up only about a third of the portfolio. As a result, the fund tends to have less interest-rate sensitivity than a lot of its peers. In 2013, when interest rates rose and some of its competitors lost money, this fund actually gained double digits.

The managers have a good amount of flexibility to invest outside of the real estate sector and can own companies closely tied to the industry, such as homebuilders. The managers also can buy companies at different points in the capital structure and, at times, have owned the debt securities of companies when they viewed it as attractive.

Leo Acheson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.