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This fund typically commits at least 80% of its total assets, including any borrowed capital for investment, to equity securities issued by companies involved in or related to the U.S. real estate market. These companies include those directly within the real estate industry or in real estate-adjacent sectors. Up to 15% of the fund's net assets may also be allocated to securities from Canadian issuers. It is important to note that this fund is non-diversified.
Is JRE's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
Retirement income requires more than just high yield. REIT funds may not be the best solution. A balanced REIT portfolio can offer income and growth.
Janus Henderson U.S. Real Estate ETF returned 5.60% and the FTSE Nareit Equity REITs Index returned 4.80%. Data center landlords Digital Realty and Equinix added alpha, alongside global hotel brand Marriott International. Real estate services company CBRE Group and Sunbelt-focused apartment landlord Mid-America Apartment Communities detracted.
Despite recent price declines, REITs' future value has increased due to higher rental rates, increased property values, and reduced competing supply. Higher market demanded returns have steepened the slope, causing REIT prices to drop despite improved fundamentals and future value. The price drop is driven by higher expected returns, not impaired future value, making current REIT valuations a buying opportunity.
Real estate investment spreads are healthier today with higher cap rates and cost of capital, enhancing long-term returns despite similar nominal spreads. Higher cap rates lead to more accretive organic growth, reinvestment, dividends, debt reduction, and buybacks compared to the low-rate environment of early 2022. The current 8% cap rate and 6% cost of capital environment are more favorable for REITs than the previous 6% and 4% scenarios.
Passive investors commonly outperform active investors. REITs are an exception in which active strategies outperform. Here is what some of the world's best REIT investors are today buying.