The big market sell-off dominated headlines over the weekend and into the start of the week. Whether sparked by the Bank of Japan raising rates, causing carry trades to unwind, or from unemployment numbers, investors are seeing crowded trades into huge names take a hit. One area that has avoided a lot of that punishment, however, looks to be real estate, with real estate ETF AVRE standing out.
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Real estate provides a source of diversification. When some stocks struggle, real estate can provide a consistent benefit to buoy an overall portfolio. Real estate itself continues many different avenues for investing, like REITs. REITs could be set to benefit from potential rate cuts that could be accelerated by this recent market sell-off. REITs range from commercial to retail shopping center REITs, too. The real estate investment trusts can provide some additional income, too, to benefit portfolios.
Market Selloff Drama – Look to Real Estate?
Amid this market selloff, real estate and REITs have largely avoided the brunt of the pain. Investors who were shorting small caps or going long on the big names have so far felt quite a bit more of the punishment.
The real estate ETF AVRE’s resilience has also underscored that contrast. AVRE, the Avantis Real Estate ETF, launched in September 2021, with its three-year ETF milestone this Fall. The real estate strategy has returned 1.25% over the last five days per YCharts, outperforming the MSCI World Net Total Return Index. Per Avantis Investors data, AVRE has returned 6.4% over one month, outperforming its benchmark, the S&P Global REIT Index.
Charging a 17 bps fee, AVRE looks at global real estate stocks with appealing risk characteristics and potentially higher returns. The real estate ETF looks at REITs and REIT-like firms, too, located in countries in its benchmark. For investors looking for an active ETF to diversify away from some of the market selloff drama, AVRE could appeal, potentially benefitting from medium-term rate cuts.
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