Investors interested in the real estate investment trusts segment may look to ETF strategies that provide targeted exposure to the areas with the most opportunity.
“When you say real estate or you say REITs, you traditionally think index, and if you want industrials, but don’t want residential, you still have to take some of the residential,” Phil Eichinger, Senior Vice president of Pacer ETFs, said at the 2018 Morningstar Invest Conference.
With traditional index-based REITs funds, investors will have to take all of the REITs exposure since the individual sub-sectors are all grouped together. However, Pacer has come out with more targeted sub-sector exposures.
Pacer ETFs recently launched the Pacer Benchmark Industrial Real Estate SCTR ETF (NYSEArca: INDS), Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (NYSEArca: SRVR) and Pacer Benchmark Retail Real Estate SCTR ETF (NYSEArca: RTL).
These new real estate focused ETFs help investors gain exposure to the growing e-commerce space by investing in data center and distribution center REITs, along with higher quality retail real estate.
INDS tries to reflect the performance of the Benchmark Industrial Real Estate SCTR Index, which is comprised of cell tower REITs, data center REITs, and similar facilities – these cell towers and data processing centers store the information and handle the orders that start the e-commerce process.
SRVR tries to reflect the performance of the Benchmark Data & Infrastructure Real Estate SCTR Index, which is comprised of real estate investment trusts that specialize in the logistics required to make e-commerce work. The portfolio includes warehouses, distribution centers and similar facilities that allow for e-commerce companies to ship goods to their final destinations, sometimes within hours.
Additionally, RTL tries to reflect the performance of the Benchmark Retail Real Estate SCTR Index, which is made up of shopping centers, shopping malls and similar structures that are thriving enterprises filled with retail establishments and are located in prime locations with quality tenants throughout the country.
“Like most of the products you’ve seen from us, we look at the different sectors, the different segments where we think we can get some outperformance and dispersion in returns,” Eichinger said.
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