In this article, we discuss 5 best REIT ETFs to buy now. If you want to read our detailed analysis of the real estate industry and other exchange-traded funds in the list, go directly to read 10 Best REIT ETFs to Buy Now.
5. Invesco Active U.S. Real Estate Fund (NYSE:PSR)
Invesco Active U.S. Real Estate Fund (NYSE:PSR) invests in securities that are included in the FTSE Nareit All Equity REIT index at the time of purchase. The fund selects the attractively valued stocks by using quantitative and statistical methods while managing risks. The fund was founded in 2008 and has delivered a 361.3% return to shareholders since then.
As of June, Invesco Active U.S. Real Estate Fund (NYSE:PSR) holds 81 stocks in its portfolio with an expense ratio of 0.35%. On March 28, the fund declared a quarterly distribution of $0.6307 per share, with a yield of 2.58%, as of June 13. In May, Morningstar gave the fund 4 stars out of 146 funds for its 10-year performance.
Public Storage (NYSE:PSA) is one of the major holdings of Invesco Active U.S. Real Estate Fund (NYSE:PSR), representing 1.64% of its portfolio. The self-storage company provides storage units for the personal and business needs of its consumers. Appreciating the company’s strong balance sheet, BMO Capital upgraded Public Storage (NYSE:PSA) to Outperform in May, with a $370 price target. The firm highlighted the defensive nature of the storage sector, which is highly needed in the current unstable environment.
In Q1 2022, Public Storage (NYSE:PSA) posted an FFO of $3.65, which beat estimates by $0.06. The company’s revenue for the quarter also presented a 15.8% year-over-year growth at $749.2 million.
At the end of March 2022, 35 hedge funds in Insider Monkey’s database reported owning stakes in Public Storage (NYSE:PSA), up from 33 in the previous quarter. The collective value of these stakes is over $874.6 million. With a stake worth $260 million, AQR Capital held the largest position in the California-based company in Q1 2022.
Baron Funds mentioned Public Storage (NYSE:PSA) in its recently-published Q1 2022 investor letter. Here is what the firm has to say:
“Public Storage Incorporated is a REIT that is the world’s largest owner, operator, and developer of self-storage facilities. The company’s nearly 2,500 self-storage facilities across the U.S. serve more than one million customers. The company has achieved the number one market position in 14 of its top 15 markets and the leading brand among consumers. We are encouraged about the company’s prospects due to our expectations for the continuation of strong occupancy and rent trends, limited new supply, mid-teens organic cash flow growth, the potential for mergers and acquisitions activity in part due to the company’s well-capitalized and low leverage balance sheet, and the ability to increase rents monthly to combat inflation headwinds. We believe Public Storage’s shares are currently valued at a discount to private market self-storage values and offer prospects for mid-teens total returns over the next few years.”
4. Vanguard Global ex-U.S. Real Estate Index Fund (NASDAQ:VNQI)
Vanguard Global ex-U.S. Real Estate Index Fund (NASDAQ:VNQI) invests in stocks in the S&P 500 Global ex-US Property Index that represents real estate stocks in over 30 countries. The firm aims to provide broad exposure to investors across international REIT equity markets. The fund has a total of 702 stocks in its portfolio, with total net assets amounting to $5.1 billion.
As Vanguard Global ex-U.S. Real Estate Index Fund (NASDAQ:VNQI) excludes American companies, its holdings are scattered around the world, with Europe, the Pacific, and North America representing 25.8%, 47.8%, and 3.20% of its portfolio, respectively.
Goodman Group (ASX:GMG.AX) is the fund’s second-largest holding, representing 2.53% of its portfolio. The company is an integrated commercial and industrial property group that manages real estate in over 14 countries. At the end of March 2022, Goodman Group (ASX:GMG.AX) reported over $68.7 billion in assets under management. Moreover, the company also reported its 89 projects that are under development and hold a total value of $13.4 billion.
3. The Real Estate Select Sector SPDR Fund (NYSE:XLRE)
The Real Estate Select Sector SPDR Fund (NYSE:XLRE) covers a variety of top real estate companies in the S&P 500 index. It includes companies from real estate management and development and REITs. The fund was founded in 2015 and returned 31.7% to shareholders since then. As of June, The Real Estate Select Sector SPDR Fund (NYSE:XLRE) holds 39 stocks in its portfolio while offering an expense ratio of 0.10%. The fund’s net assets stood at $5.05 million. On March 21, the fund announced a quarterly dividend of $0.2685 per share, with a yield of 2.61%, as of June 13.
One of the most prominent holdings of The Real Estate Select Sector SPDR Fund (NYSE:XLRE) is Digital Realty Trust, Inc. (NYSE:DLR), a California-based REIT that invests in carrier-neutral data centers and also provides peering services. In June, Citigroup acknowledged the multi-product strategy of the company which would help it to grow its future revenues and profits per share. Given this, the firm set a $160 price target on Digital Realty Trust, Inc. (NYSE:DLR), while maintaining a Buy rating on the shares.
In Q1 2022, Digital Realty Trust, Inc. (NYSE:DLR) posted an FFO of $1.67, which exceeded expectations by $0.02. Also, the company’s revenue showed a 4% year-over-year growth at $1.13 billion and also fell in line with the market estimates. For FY22, the company expects its FFO to fall between $6.80 and $6.90.
The number of hedge funds tracked by Insider Monkey owning stakes in Digital Realty Trust, Inc. (NYSE:DLR) grew to 31 in Q1 2022, from 26 in the previous quarter. These stakes hold a collective value of $556.7 million, up from $409 million worth of stakes held by hedge funds in Q4 2021. Steve Cohen and Ken Griffin were the major stakeholders of the company at the end of March 2022.
2. Schwab U.S. REIT ETF (NYSE:SCHH)
Schwab U.S. REIT ETF (NYSE:SCHH) is a passively-managed fund that tracks the market-cap-weighted index of US real estate investment trusts and excludes mortgage and hybrid REITs. The fund offers simple access to REITs as its holdings are restricted to investment trusts that directly own real estate. As of June, the fund has 141 holdings, with the top 10 positions representing 43% of the portfolio. As Schwab U.S. REIT ETF (NYSE:SCHH) selects its stocks based on market cap, the average market cap of its securities stood at $42.4 billion, as recorded in March 2022. The fund’s total assets amounted to over $6 billion at the end of May.
One of the major holdings of Schwab U.S. REIT ETF (NYSE:SCHH) is Prologis, Inc. (NYSE:PLD), a California-based REIT formed by the merger of AMB Property and ProLogis in 2011. In Q1 2022, the company posted an FFO of $1.09, beating estimates by $0.02. The company reported revenue of $1.22 billion, showcasing a 6% year-over-year growth and also beat market consensus by $130 million. For FY22, Prologis, Inc. (NYSE:PLD) expects its FFO to be in the range of $5.10 to $5.16, versus the consensus of $5.04. In June, Wells Fargo highlighted the strong business fundamentals of PLD and set a $160 price target on the stock, with an Overweight rating on the shares.
As per Insider Monkey’s database for Q1, 37 hedge funds owned stakes in Prologis, Inc. (NYSE:PLD), the same as in the previous quarter. The consolidated value of these stakes is over $546.5 million. AEW Capital Management held the largest stake in the company in Q1, worth $326.9 million.
1. Vanguard Real Estate Index Fund (NYSE:VNQ)
Vanguard Real Estate Index Fund (NYSE:VNQ) invests in stocks that are issued by REITs and tracks the return of the MSCI US Investable Market Real Estate 25/50 Index. As of June, there are a total of 183 stocks in the fund, with the top 10 holdings representing 45.3% of the portfolio. The fund’s total net assets stood at over $82.8 billion. On March 22, Vanguard Real Estate Index Fund (NYSE:VNQ) declared a quarterly distribution of $0.5767 per share, with a yield of 2.49%, as of June 13.
Welltower Inc. (NYSE:WELL) is one of the prominent holdings of the Vanguard Real Estate Index Fund (NYSE:VNQ), accounting for 2.28% of its portfolio. The REIT mainly invests in healthcare infrastructure. In May, RBC Capital raised its price target on WELL to $100, with an Outperform rating on the shares. The firm appreciated the company’s portfolio recovery and remained encouraged by the housing outlook in the US. Welltower Inc. (NYSE:WELL) reported growth in its Q1 2022 results that was driven by its acquisitions, as the company completed $787 million in acquisitions and loan funding during the quarter.
At the end of March 2022, 25 hedge funds tracked by Insider Monkey were bullish on Welltower Inc. (NYSE:WELL), up from 23 a quarter earlier. The consolidated value of these stakes is over $691.6 million.
You can also take a look at 10 Best Dividend ETFs to Buy According to Reddit and 10 Best Growth Stocks for the Next 10 Years
