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Tickers in this Article: CNS, RQI, RPF, RNP, VTR, HCN, VNO, AVB, BXP, HME
Real estate investment firm Cohen & Steers (NYSE:CNS) believes that two heads are better than one when it comes to managing a global portfolio. The firm utilizes a dual CEO approach to run the company and in many cases to cooperate on the management of in-house funds. A review of three Cohen & Steers closed end funds and their holdings can give investors direction in building out their own real estate positions.

Closed End Funds are not ETFs
Note that the following are not ETFs, but rather closed end funds that do not trade freely like an ETF. The underlying securities are what were interested in. (For further reading on these funds, read Open Your Eyes To Closed-End Funds.)

Cohen & Steers
Closed-End Funds

Year to Date
Quality Income Realty
(AMEX:RQI)

-82.12%
Premium Income Realty
(AMEX:RPF)

-83.72%
REIT & Preferred Income
(AMEX:RNP)

-74.95%
Data as of market close November 21, 2008

RQI Finds Money in Senior Care
Cohen & Steers Quality Income Realty performance caught me by surprise since it has a 100% allocation in financial services, but this slice of the industry is what has allowed the fund to perform. Its top holding, Ventas (NYSE:VTR), is a play on senior living and long term care facilities. Ventas reported strong second quarter earnings related to the purchase of 79 senior facilities from Sunrise Senior Living Inc. and increases in rents on existing properties. Other top performers since the beginning of the year include Health Care REIT (NYSE:HCN) and diversified REIT Vornado Realty Trust (NYSE:VNO).

RPF the Multi-Family Developer
Cohen & Steers Premium Income Realty has a similar makeup in comparison to the RQI fund with the addition of multifamily developer AvalonBay Communities (NYSE:AVB) among its top three stock holdings. AvalonBay is up nearly 11% since the beginning of the year, driven by improved funds from operations due to rent increase on existing properties.

RNP Benefits from Housing Pullback
Cohen & Steers REIT & Preferred Income has the highest exposure to bonds of the three funds and likewise the lowest exposure to stocks. At a glance RNP's top holdings reveal several investments into long term interest swaps along with top stock holdings including Boston Properties (NYSE:BXP) and Home Properties (NYSE:HME). Home Properties' focus on developing and rehabilitating apartment buildings has helped it benefit from the pullback in the housing market. Home Properties' stock is up more than 24% since the beginning of the year.

Final Thoughts
Martin Cohen and Robert Steers, the two CEO's of Cohen & Steers, manage the company and co-manage funds with a series of other managers. The take away for investors is that they should combine an assortment of real estate players into their portfolios just as Cohen & Steers uses a variety of managers to formulate its investment decisions. When commercial or retail real estate segments decline, investments that focus on senior living facilities or rental apartments may rise. Rather than chasing performance choose a couple of real estate investments that don't overlap and let time do the work for you.

To learn more on real estate investment trusts, be sure to read What Are REITs?

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