Is it a bad time to buy REITs ETF now?

Despite near-term challenges, the overall long-term outlook for REITs remains positive. If you are planning to invest for the long haul, REITs are still a valuable addition to your portfolio.

Firstly, the value of REITs is well-anchored by physical real estate, which in land scarce Singapore, trends upwards over the long term. Secondly, most REITs remain financially sound with strong balance sheets, low gearing and good dividend yield over the medium term.

With REITs currently trading at lower valuations, investors now have the opportunity to stock up on quality REITs at discounted prices.

If you're interested in the diversification a REIT ETF offers, why not consider Syfe's REIT+ portfolio? It tracks the SGX's i-Edge S-REIT 20 index and is broadly diversified across all four major REIT sectors.

The portfolio is similar to a REIT ETF, but with lower fees and the option of automatic dividend reinvestment. If you have further queries, do reach out to our friendly advisors!​​​

Hi anon,

I wouldn't say that the timing is bad, but whether REITs are a suitable asset class for you. Their valuations have come down though, but some of them still remain somewhat on the high side in my view.

They are leveraged and constantly in debt due the nature of their structure. Furthermore, some REITs have been constantly raising funds via rights/placement and you must be prepare to apply or be diluted. I haven't even started talking about what happened to eagle hospitality trust yet....

Hence, ask yourself if you are comfortable with the risks involved. It's ok to have some REITs, and perhaps via an ETF or UT if you do not wish to construct your own portfolio, but I would recommend that you assess your suitability to REITs as an investment asset.

There are plenty of information available online for you to read and understand the cons of REITs. We all know the pros (that's what draws us in firstly), but many people forget to consider the cons as well, some of which I have mentioned above. This is part of risk management and will go a long way to help you decide whether to invest in this particular asset or not.