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Hartford Risk-Optimized Multifactor REIT Index

Objective

  • Seeks to diversify across property types and invests deeper into the US REIT universe, where there may be more opportunity for growth
  • Focuses on reducing single-company risk and freeing capital for allocation toward companies with potentially more favorable investment attributes
  • Seeks improved returns and similar risk (relative to traditional capitalization-weighted REIT strategies) over a complete market cycle

Description of Methodology

The rules-based, proprietary methodology employs a multi-layered risk-controlled approach that seeks to de-concentrate individual security risks while selecting companies exhibiting favorable risk premia factors including quality, momentum, and value. The Strategy Index seeks to harvest risk premia factors through systematic risk- and factor-weighting twice annually, with a reconstitution occurring in March and September.

  Hartford Multifactor Index Methodologies

Characteristics

Holdings Characteristics
(as of 12/31/2017)
Funds
Price-to-Book 2.52
Price-to-Earnings 41.70
Return on Invested Capital(%) 5.34
Nominal Companies 50
Effective Companies 49
Market Cap Distribution(%)
(as of 12/31/2017)
Index
Less than $2B 33.9
$2B - $10B 55.6
$10B - $100B 10.5
Greater than $100B 0.0

Top Ten Holdings (%)

(as of 12/31/2017)
Ryman Hospitality Properties Inc 2.43
National Storage Affiliates Trust 2.42
Xenia Hotels & Resorts Inc 2.40
CubeSmart 2.38
Armada Hoffler Properties Inc 2.36
Summit Hotel Properties Inc 2.33
Simon Property Group Inc. 2.25
Select Income REIT 2.24
Tanger Factory Outlet Centers Inc. 2.19
Camden Property Trust 2.17
Total of Top Ten Holdings 23.17

Holdings are subject to change. Percentages may be rounded.

Sub-Industry Allocation (%)
Sectors 11/30/2017 12/31/2017
Retail REIT 29.2 29.9
Diversified REIT 8.9 8.8
Hotel REIT 7.5 7.7
Industrial REIT 6.4 6.3
Specialty REIT 18.1 16.4
Healthcare REIT 9.2 9.5
Residential REIT 13.6 13.8
Office REIT 7.3 7.6

Performance

Performance (%)
% (as of 12/31/2017)
Average Annual Total Returns % (as of 12/31/2017)
YTD 1YR 3YR 5YR SI1
Risk-Optimized Multifactor REIT Index 5.95 5.95 --- --- 13.60
Performance (%)
% (as of 12/31/2017)
Average Annual Total Returns % (as of 12/31/2017)
YTD 1YR 3YR 5YR SI1
Risk-Optimized Multifactor REIT Index 5.95 5.95 --- --- 13.60

SI = Since Inception.
Index Inception:12/31/2015

Past performance is not indicative of future results.

Performance reflects cumulative total returns for periods of less than one year and average annual total returns for periods of one year or greater.

Indices are unmanaged and not available for direct investment. 

Key Facts

Key Facts  (as of 1/19/2018)
Ticker LROREX Index
Inception December 31, 2015
Current Index Value 1231.98
Last Closing Level 1222.25
Change 9.73
Change % 0.80%
52-Week-High 1311.70
52-Week-Low 1172.70
Number Of Holdings 50

Important Notes

Hartford Risk-Optimized Multifactor REIT Index is the exclusive property of Lattice Strategies LLC (a wholly owned subsidiary of Hartford Funds Management Company, LLC) which has contracted with Solactive AG to maintain and calculate the Index. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards Lattice Strategies, Solactive AG has no obligation to point out errors in the Index to third parties.

Index returns do not represent actual fund or portfolio returns. A fund or portfolio may differ significantly from the index. The index does not reflect any management fees, transaction fees, brokerage expenses, or other expenses that may reduce returns. Index returns assume that dividends have been reinvested. Investors cannot invest directly in the Index.

A WORD ABOUT RISK

There are risks associated with investing, including the possible loss of principal.

Sources of all data: Bloomberg and Hartford Funds.

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