NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE)

The NFI-ODCE is a capitalization-weighted, gross of fee, time-weighted return index with an inception date of December 31, 1977.  Supplemental data is also provided, such as equal-weight and net of fee returns, for informational purposes and additional analysis. 

Open-end funds are generally defined as infinite-life vehicles consisting of multiple investors who have the ability to enter or exit the fund on a periodic basis, subject to contribution and/or redemption requests, thereby providing a degree of potential investment liquidity.  The term Diversified Core Equity style typically reflects lower risk investment strategies utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties  diversified across regions and property types.

The NFI-ODCE, like the NCREIF Property Index (NPI) and other stock and bond indices, is a capitalization-weighted index based on each fund’s net invested capital, which is defined as beginning market value net assets (BMV), adjusted for weighted cash flows (WCF) during the period. 

Additional information, such as the equally-weighted NFI-ODCE, is also presented to show what the results would be if all funds were treated equally, regardless of size. 

Additionally, NCREIF offers an NFI-ODCE Performance Attribution Report.  This report provides users with full disclosure and transparency regarding the main attributes and key drivers of the benchmark.

Click here for further information around the NFI-ODCE Performance Attribution report.

Quarterly Returns

The table below represents gross total returns (value weight) for the NFI-ODCE


The NFI-ODCE, short for NCREIF Fund Index - Open End Diversified Core Equity, is the first of the NCREIF Fund Database products and is an index of investment returns reporting on both a historical and current basis the results of 38 open-end commingled funds pursuing a core investment strategy, some of which have performance histories dating back to the 1970s. The NFI-ODCE Index is capitalization-weighted and is reported gross of fees. Measurement is time-weighted. NCREIF will calculate the overall aggregated Index return.

The universe of funds comprising the NFI-ODCE employ, or did employ in the case of liquidated funds, a generally acknowledged investment style or strategy known in the business as "core" investing. Every fund included in the Index as well as any existing funds or those in the planning stages that aspire to be included in the Index must meet the following inclusion criteria.

The fund must be marketed as an open-end fund. If at any time a fund closes to new contributions and redemptions, NCREIF Staff will have the discretion to discontinue the fund in the Index (historical data will remain in the Index). All exclusions and deletions will be reported to the Board of Directors with adherence to the NCREIF data masking criteria to allow for review.

The fund must market itself as a diversified core investment strategy, primarily investing in private equity real estate, as follows:

  • Real Estate – at least 80% of the fund’s gross assets are invested in private equity direct real estate. Private equity direct real estate are individual properties that are submitted to NCREIF and are individually valued representing the fund’s effective ownership share of property gross market value.
  • Domain – at least 95% of the fund’s aggregate properties gross market value at effective ownership share of all real estate are invested in US markets.
  • Property Types – at least 75% of the fund’s aggregate gross market value of real estate at effective ownership share are invested in office, industrial, apartment, and retail property types. For purposes of this test, the fund is allowed to include the value of a loan investment if the underlying collateral is one of the four property types mentioned
  • Stabilized – at least 75% of the fund’s gross assets are invested in private equity direct real estate properties that are 75% or more leased. The value of the real estate is determined using the property gross market values at the fund’s effective ownership share.
  • Leverage – no more than 35% Tier 1 leverage as defined in the NCREIF PREA Reporting Standards, which uses the fund’s outstanding principal balance of debt relative to the fund’s gross assets. For certain accounting methods, such as the non-operating equity investment model, the fund’s assets and liabilities must be appropriately grossed-up to account for off-balance sheet debt.
  • Diversification – no more than 60% (± for market forces) of the gross market value of real estate in one property type, and must be invested in three of the four main property types, with a minimum of 5% in each the three types. No more than 65% (± for market forces) of real estate gross market value in one region. For purposes of diversification, the fund is allowed to include the value of a loan investment if the underlying collateral is one of the four main property types. Property types and regions are as defined by the NCREIF Property Index (“NPI”).

The fund must comply with the NCREIF PREA Reporting Standards, including annual audits, quarterly valuations and time-weighted returns. Further, the fund must submit information in accordance with the NCREIF Fund Data Collection and Reporting Manual. Timely, accurate and industry compliant data is required. 

For the fund formula, use the modified-dietz formula which is well documented in GIPS. This is the industry standard for all asset classes.

The formula is basically;
1) Numerator = Total Return $ (Income and Appreciation)
2) Denominator = Weighted Average Equity (Beginning Net

Assets plus weighted contributions minus weighted distributions for the period, generally quarterly). The weighting of contributions and distributions is based on the actual day of each cash flow and how long the cash flow is "in" or "out" of the portfolio.

The numerator varies depending upon whether it's before or after fee. The denominator is the same for both