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July 31, 2017 at 06:29 AM
Given the slow rise of interest rates, is it a good time to invest in real estate?
According to the CBRE 2017 Global Report on U.S. real estate, “Growth and supportive monetary conditions are good for real estate,” but returns in 2017 may not be as good as last year.
The Los Angeles-based commercial real estate services and investment firm, expects office leasing activity to be slightly weaker and vacancy rates slightly higher but it doesn’t expect these developments will be “enough to undermine rents, or even rental growth.” It anticipates total returns in the “4% to 6% range for prime unlevered real estate.“
But many REITs and mutual funds have gained far more so far this year. Here are some top-performing REITs year-to-date through July 26, as ranked by ETFdb.com, as well as top-performing mutual funds ranked by Morningstar.
5 Top Real Estate ETFs
1. Tierra XP Latin America Real Estate (LARE): 30.42% YTD
This 19-month old ETF with only $4.6 million AUM is issued by ETF Managers Group, and invests mainly in a broad swath of Latin American real estate stocks, corresponding to the Solactive Latin America Real Estate Index, with the heaviest weighting in industrial areas. As of July 26, it owned 61 holdings, including Macquarie Mexico Real Estate Management SA de CV and Fibro Uno Administracion SA de CV. Its expense ratio is 0.79%
2. ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN Series B ETF (MRRL): 29.49% YTD
Issued by UBS and started in 2015 with an ETN structure, this ETF is linked to the MVIS Global Mortgage REITs Index, which is made up of publicly traded mortgage REITs. It has an AUM of $17.4 million with an expense ratio of 0.40%.
3. VanEck Vectors Mortgage REIT Income ETF (MORT): 14.87% YTD
This fund launched in 2011 by VanEck, also tries to replicate the MVIS Global Mortgage REITs Index. Some of its top holdings include Annaly Capital Management, AGNC Investment Corp. and Starwood Property Trust Inc. It has an AUM of $143 million and expense ratio of 0.41%
4. iShares Mortgage Real Estate Capped ETF (REM): 14.45% YTD
This ETF, launched by iShares in 2007, has $1.3 billion under management with a 0.48% expense ratio. It invests in residential and commercial real estate, mortgage finance, and savings association sectors of the U.S. equity market. Its top three holdings are in Annaly Capital Management, AGNC Investment Corp. and Starwood Property Trust.
5. SuperDividend REIT ETF (SRET): 11.55% YTD
