ETF Spotlight on the Guggenheim Wilshire US REIT ETF (NYSEArca: WREI), part of an ongoing series.
Assets: $16.6 million
Objective: The WilShire U.S. REIT ETF tries to reflect the performance of the WilShire US Real Estate Investment Trust Index, which includes a diversified selection of property REITs taken from the broader WilShire 5000 Total Market Index.
Holdings: Top holdings include Simon Property Group (NYSE: SPG) 9.7%, Public Storage (NYSE: PSA) 4.6%, Equity Residential (NYSE: EQR) 4.2%, Prologis (NYSE: PLD) 3.9% and Vornado Realty Trust (NYSE: VNO) 3.7%.
What You Should Know:
- Guggenheim Investments sponsors the fund.
- WREI has a 0.32% expense ratio.
- The ETF has 114 holdings and the top ten components make up 43.5% of the overall portfolio.
- The fund includes sub sector weights toward diversified REITs, health care REITs, hotels & resort REITs, industrial REITs, office REITs, residential REITs, retail REITs and specialized REITs.
- WREI is up 2.3% over the past month, up 7.7% over the last three months and up 17.1% year-to-date.
- The ETF shows a 12-month yield of 2.87%.
- The Guggenheim REIT ETF provides broad exposure to real estate investment trusts.
- REITs are companies that mange commercial properties and collect on the rent.
- A real estate firm has to pay out 90% of its taxable income to shareholders as dividends to qualify as a REIT.
- These investments have allowed investors to gain exposure to commercial real estate and diversify traditional equity and fixed-income investment portfolios.
- Potential investors should be aware that the risk of rising rates posees as the largest risk to the REIT sector.
Next page: The latest news
The Latest News:
- Real estate investment trusts under the FTSE NAREIT All REITs index returned 14.8% over the first five months of the year – one the best performing asset classes, according to Pension & Investments.
- REITs have been outperforming as investors seek out high-yield assets, with benchmark 10-year yields falling over 50 basis points this year.
- Investors who believe interest rates will remain low for several more years can can take a look at REITs.
- “So far this year, they are right,” KBW analyst Michael Widner said in a MarketWatch article. “That being said, last year they were wrong. The caveat is you have to be comfortable that rates aren’t going up.”
Guggenheim Wilshire US REIT ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.