NCREIF - CREFC Debt Fund Aggregate Announcement
May 13, 2025
As you know, we have been producing the NCREIF / CREFC Open-end Debt Fund Aggregate for approximately two years. Today, the Aggregate includes funds with sharply different styles and strategies of debt investing, making it useful for understanding the overall risk and return characteristics of the open-end debt fund market. Currently, the Aggregate is too varied to serve as an index or a benchmarking tool. Nevertheless, it represents a crucial first step in developing a more targeted index of funds operating within a specific style or strategy.
Introducing Open-End Debt Fund Investment Styles and Criteria
A task force and the data contributing managers have been working diligently for the past few years to create index parameters / fund inclusion criteria, for three different styles of open-end debt fund investment.
These parameters will be used to categorize the funds included in the Aggregate into their respective style indices. The Aggregate will continue to be produced and will include open-end debt funds regardless of the fund’s style or strategy. In addition, we anticipate creating the first focused open-end debt fund index later this year.
We are seeking NCREIF and CREFC member feedback on both the naming of the three style indices and the related inclusion criteria parameters.
In addition to developing the inclusion criteria, getting the names right is critical as these will become the official names of the NCREIF / CREFC Open-End Debt Fund Index products. Please keep in mind that the proposed fund index inclusion criteria will not be perfect from the start, but we must start somewhere, and this is it. Once the first debt fund style index is launched, we will monitor it, continue to seek and receive feedback from participants, make changes as necessary, and look forward to more open-end debt funds being created in order to improve and expand the suite of open-end debt fund indices.
Attached via the link below is a document that outlines the full proposal. We urge you to review and provide feedback to us on our progress thus far as this is the most optimal method for ensuring its success.