Which S-Reit ETF would you recommend for stable dividends?

Hi Anon,

The current listing of S-REIT ETFs out there include:

1. Lion-Philip S-REIT ETF

2. NikkoAM-Straits Trading Asia Ex Japan REIT ETF

3. Philip SGX APAC Dividend Leaders REIT ETF

Most of the S-REITS out there cover 6 different types:

1. Industrial

2. Hospitality

3. Office

4. Retail

5. Healthcare

6. Data Centres
   As of today, 21st October 2019, the prices of the ETFs are:

SGD1.1670 Lion-Philip S-REIT ETF

SGD1.2710 NikkoAM-Straits Trading Asia Ex Japan REIT ETF

SGD1.5010 SGX APAC Dividend Leaders REIT ETF

and their dividend yields:

4.22% Lion-Philip S-REIT ETF

3.96% NikkoAM-Straits Trading Asia Ex Japan REIT ETF

5.89% Philip SGX APAC Dividend Leaders REIT ETF

To determine amongst which ETFs, you might want to consider the composition of REITS in each ETF and from there, determine the impact of interest rates because REITS can be highly leveraged and they would need to repay their loans. This means that their bottom lines will be affected by changes in interest rates. (Interest rate risk)

A further impact of the composition of the ETF is the macro outlook on the economy as macro indicators (CPI, GDP) can influence specific REIT sectors such as Retail or Hospitality.

Therefore you should not solely look at dividend yields as a sole indicator in terms of stability of divideneds but also take into account what percentage of the sector REITS have been allocated by each ETF.

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More FYI Information:

Lion-Philips S-REIT ETF:

• 26.2% Retail, 24.6% Industrial, 22.7% Office, 5.7% Hotels, 5.0% Healthcare

• Semi-Annual Dividends, 0.50% Management Fee

Philips SGX APAC Dividend Leaders REIT ETF:

• 35.51% Retail, 31.61% Diversified, 18.08% Industrial, Office 13.70%

• Semi-Annual Dividends, 0.30% Management Fee

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF:

• 36.7% Retail, 26.4% Industrial, 15.7% Retail, 15.1% Diversified

• Quarterly Dividends, 0.50% Management Fee

Hi!

Real estate investment trusts (REIT) are a basket of securitised real estate assets and are considered to have shown strong returns over a period of time. A REIT exchange-traded fund (ETF), which holds baskets of these securities, offers a liquid, low-cost way to invest in the real estate asset class.

Based on quality and assets under management (AUM) as of April 6, 2019, here’s a curated list of the top five real estate ETFs:

Vanguard Real Estate ETF (VNQ)

Avg. Volume: 7 million

Net Assets: $61 billion

P/E Ratio (TTM): 27.6

Yield: 3.96%

YTD Return: 17.89%

Expense Ratio (net): 0.12%

Schwab U.S. REIT ETF (SCHH)

Avg. Volume: 828,000

Net Assets: $5.45 billion

P/E Ratio (TTM): 31.5

Yield: 2.85%

YTD Return: 16.7%

Expense Ratio (net): 0.07%

iShares U.S. Real Estate ETF (IYR)

Avg. Volume: 9.1 million

Net Assets: $4.6 billion

P/E Ratio (TTM): 33.7

Yield: 3.0%

YTD Return: 17.4%

Expense Ratio (net): 0.43%

iShares Cohen & Steers REIT ETF (ICF)

Avg. Volume: 124,000

Net Assets: $2.18 billion

P/E Ratio (TTM): 14.3

Yield: 2.7%

YTD Return: 17.3%

Expense Ratio (net): 0.34%

SPDR Dow Jones REIT ETF (RWR)

Avg. Volume: 249,000

Net Assets: $2.94 billion

P/E Ratio (TTM): 33.4

Yield: 3.7%

YTD Return: 16.3%

Expense Ratio (net): 0.25%

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