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J J

24 Aug 2020

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General Investing

Why is REIT ETFs (eg SGX:CFA) dividend payout typically lower compared to individual REITs like Ascendas REIT?

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Wrong Sean

24 Aug 2020

The component REITs are a percentage of the entire portfolio so correspondingly their distribution payout are a percentage of the ETF payout. Averaging out the distributions from the REITs and after costs, the ETF dividend payout could be lesser than a high yield REIT.

In the ETF, you are spreading risk across the component REITs. If you only have one REIT, any changes in the distribution payout will have a higher impact.

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