We recently spoke about inflows in one of the largest U.S. Equity REIT based ETFs, IYR (iShares Real Estate, Expense Ratio 0.48%), and today (Friday) the fund seems to be technically breaking out, trading at its highest levels since early November of last year.
In the trailing one month period, IYR has reeled in about $417 million net, but has seen a portion of that flow out earlier this week, likely as a result of the wholesale selling that went on across global equities. Speaking of global, we would like to change the dial to Global REITs today as opposed to U.S. based ones, and the largest fund in the sub-category is currently RWX (SPDR DJ International Real Estate, Expense Ratio 0.59%).
The fund has about $4.1 billion in assets under management while averaging about 458,000 shares traded daily, and has its greatest exposure to Japan (21.34% of the portfolio), followed by notable allocations to the United Kingdom (12.87%) and Australia (12.62%), Hong Kong (9.9%), France (9.26%), and so on.
Continents including Europe, Asia, Australia, Africa, and both North and South America are represented within the index holdings in RWX, and funds like this will likely appeal to those managers that seek REIT exposure with an international flavor.
There are a number of funds that compete with RWX, namely VNQI (Vanguard Global ex-U.S. Real Estate, Expense Ratio 0.32%), which holds a bit north of $1 billion in AUM currently. VNQI tracks an S&P index as opposed to one from Dow Jones as in RWX’s case and has a similar portfolio allocation in terms of countries and continents where it invests in REITs.
SPDRs also publicly lists RWO (SPDR DJ Global Real Estate, Expense Ratio 0.50%) which tracks a different underlying index than that of RWX and thus the slightly different fund name as well. RWO currently holds about $987 million in assets in its own right, so the fund has also been met with some success in terms of appealing to ETF investors.
There are nine other funds in this Global Real Estate category, with the largest ones following the aforementioned ETFs in terms of assets being IFGL (iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S., Expense Ratio 0.48%), WPS (iShares S&P World ex-U.S. Property, Expense Ratio 0.48%), DRW (WisdomTree Global ex-U.S. Real Estate, Expense Ratio 0.58%), and GRI (ALPS Cohen & Steers Global Realty Majors, Expense Ratio 0.55%).
Other funds we have our eyes on include FFR (First Trust FTSE EPRA/NAREIT Global Real Estate, Expense Ratio 0.60%) as well as TAO (Guggenheim China Real Estate, Expense Ratio 0.65%), and the lesser known IFEU (iShares FTSE EPRA/NAREIT Europe, Expense Ratio 0.48%), IFAS (iShares FTSE EPRA/NAREIT Asia, Expense Ratio 0.48%), and GQRE (FlexShares Global Quality Real Estate, Expense Ratio 0.45%).
While significantly lacking the YTD impressive performance that U.S. listed REITs have generated, likely due to the fact that some still have reservations regarding international equities at this point, as is evident from fund flows in say the Emerging Markets space for the past several weeks or months, most of these Global REIT plays have bounced back nicely from recent mid-week lows, and U.S. REIT (IYR) equity strength in the background certainly does not hurt.
SPDR Dow Jones International Real Estate ETF
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
Street One Financial is an educational/research firm utilizing the Broker Dealer services of GWM Group Inc (RLCC) a FINRA registered Broker/Dealer. All trades are executed through GWM Group (RLCC) and cleared by Fidelity (NFS)DTC number 0226. Street One Financial LLC makes available products and services offered by GWM Group Inc., a registered broker-dealer and Member Securities Investor Protection Corporation (SIPC), Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.