Currently, real estate investments are back on the radar for many investors. Since engaging with real estate as landlords can be time-consuming, many asset owners explore investing in real estate investment trusts (REITs), as this asset class offers straightforward access to commercial real estate via exchange-traded funds. ETF pioneer FinEx now issued an ETF, the FinEx US REIT UCITS ETF, focusing on US REITs, which tracks the Solactive GPR United States REIT ex Timber and Mortgage Index. The ETF started trading on the Moscow Exchange on November 22nd, 2021.
REIT investment has become popular among investors as REITs’ nature allows investors to engage with real estate investment seamlessly without the process involved that is required to buy physical property directly on their account. Additionally, REIT investors gain access to commercial property, such as office towers or shopping malls, which would be nearly impossible to access for the average retail investor. On top of it, REITs tend to offer above-average dividend yields compared to the general stock market.
The underlying index for the FinEx US REIT UCITS ETF is the Solactive GPR United States REIT ex Timber and Mortgage Index. To qualify for index inclusion, REITs must be part of the Solactive GBS United States Investable Universe Index and are not allowed to generate more than 60% of recurrent income from activities in timber or mortgage as reported in the most recent annual report. The classification of timber and mortgage REITs is conducted entirely by real estate data provider Global Property Research (GPR).
“In light of low interest rates, real estate investment became an attractive asset class for many investors, and REIT investments are an efficient approach to diversify one’s portfolio with real estate investments without the effort of buying and owning property directly,” comments Timo Pfeiffer, Chief Markets Officer at Solactive.