The Federal Reserve’s interest rate hikes to combat high inflation and consecutive economic contraction have kept the mortgage rates volatile. The 30-year fixed-rate mortgage averaged 4.99% in the week ending August 4, down from 5.3% the week before. But the rate is significantly higher than 2.77% a year ago.
This is expected to boost the sentiment of investors and homeowners. Consequently, investing in ETFs that offer significant exposure to this market could be an ideal decision now.
Dividend-paying real estate ETFs Global X SuperDividend REIT ETF (SRET), Cambria Global Real Estate ETF (BLDG), and NETLease Corporate Real Estate ETF (NETL) could be great investments now.
Global X SuperDividend REIT ETF (SRET)
SRET tracks the performance of REITs that rank among the highest yielding REITs globally, as determined by Solactive AG, the underlying index provider. The fund invests at least 80% of its total assets in the underlying index's securities, American Depositary Receipts (ADRs), and Global Depositary Receipts (GDRs).
The fund has approximately $347.83 million assets under management (AUM). SRET’s major holdings include W. P. Carey Inc. (WPC), Gaming and Leisure Properties, Inc. (GLPI), and Getty Realty Corp. (GTY).
The ETF distributes $0.60 in dividends annually, translating to a yield of 7%. Its four-year average dividend yield is 8.6%.
XLE has a 0.58% expense ratio, higher than the 0.43% category average. The fund has gained 4.2% over the past month and is currently trading at $8.53, 13% above its 52-week low of $7.55.
It is no surprise that SRET has an overall A rating, which equates to Strong Buy in our POWR Ratings system.
The ETF also has an A rating for Trade and Peer and a B for Buy & Hold. To see SRET’s POWR Ratings, click here. Of the 30 ETFs in the B-rated Real Estate ETFs group, SRET is ranked #1.
Cambria Global Real Estate ETF (BLDG)
BLDG seeks income and capital appreciation by investing primarily in the securities of domestic and foreign companies engaged in the real estate sector and real-estate-related industries that exhibit favorable multi-factor metrics, such as value, quality, and momentum, as per a quantitative methodology developed by Cambria Investment Management, L.P. It holds more than 25% of its assets in real estate-related industries.
The fund has approximately $18.23 million AUM. BLDG’s major holdings include U.S. Dollar, Yeni Gimat Gayrimenkul Yatirim Ortakligi A.S. (YGGYO.IS), and Essex Property Trust, Inc. (ESS).
The ETF distributes $2.93 in dividends annually, translating to a yield of 1.58%. Its four-year average dividend yield is 4.9%.
BLDG has a 0.59% expense ratio, higher than the 0.44% category average. BLDG has gained 3.4% over the past month and is currently trading at $27.85, 7.3% higher than its 52-week low of $26.05. The ETF’s net inflows have totaled $5.17 million over the past year.
BLDG’s strong fundamentals are reflected in its POWR Ratings. The ETF has an overall B grade, equating to a Buy rating in our proprietary rating system.
BLDG also has a B rating for Trade and Buy & Hold. Click here to access BLDG’s rating in Peer grade. It is ranked #18 in the Real Estate ETFs group.
NETLease Corporate Real Estate ETF (NETL)
This non-diversified index is generally composed of the U.S.-listed equity securities of companies that derive at least 85% of their earnings or revenues from real estate operations in the net lease real estate sector. At least 80% of the fund’s net assets, plus borrowings for investment purposes, will be invested in corporate real estate companies.
The fund has approximately $108.83 million AUM. NETL’s major holdings include VICI Properties Inc (VICI), Realty Income Corporation (O), and National Retail Properties, Inc. (NNN).
The ETF distributes $1.14 in dividends annually, translating to a dividend yield of 4.2%. Its four-year average dividend yield is 3.3%.
NETL has a 0.60% expense ratio, which is higher than the 0.43% category average. The ETF has gained 3.2% over the past month and is currently trading at $27.16, 12% above its 52-week low of $24.25. The ETF’s net inflows amounted to $7.85 million over the past year.
NETL’s POWR Ratings reflect this promising outlook. The ETF has an overall B grade, which equates to a Buy in our proprietary rating system.
NETL also has an A rating for Peer and a B for Buy & Hold and Trade. Click here to see NETL’s component grades. NETL is ranked #14 in the same group.
SRET shares were trading at $8.48 per share on Friday afternoon, down $0.05 (-0.59%). Year-to-date, SRET has declined -7.83%, versus a -12.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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