• ETFs

    New ETF - pre-register today: FTSE International Property (Hedged) ETF

    Arian Neiron, Managing Director and Head of Asia Pacific
    07 March 2019
     

    Pre-register your interest in 'REIT' today - click here

    Australians have a love affair with property. A glance at the AFR Rich List highlights that property has enabled vast fortunes to be made by developers and investors. Frank Lowy, John Saunders, John Gandel and Hui Wing Mau to name a few. Many of them have built their empires primarily on development but also on diversifying in real estate beyond Australian shores.

    Listed Real Estate Investment Trusts (REITs) enable investors to buy into property, without having to invest the huge sums that are involved in buying property directly. REITs primarily hold assets rather than develop them however development does form part of the income. But the opportunities to invest in international REITs in Australia are limited. A-REITs account for just 3% of the world’s REIT opportunity. The US, Europe and Asia offer investment opportunities not readily available in Australia, including student housing developments and storage including data warehouses.

    Accessing Global REITs has been limited until now.

    VanEck Vectors FTSE International Property (Hedged) ETF (ASX code: REIT):

    REIT the ETF will soon start trading on ASX and investors will be able to access listed international property via a single trade on ASX. REIT is another Australian first by VanEck, being the only ETF that tracks the highly regarded international property benchmark: the FTSE EPRA Nareit Developed ex Australia Rental Index AUD Hedged.

    To add appeal to investors, recent changes to the tax law will allow REIT to pay a smoother flow of dividends each quarter than would have been possible in the past.

    FTSE EPRA Nareit Developed ex Australia Rental Index AUD Hedged (REIT Index)

    Below is an overview of the process FTSE follows to determine the constituents of the REIT Index:

    1. The eligible universe of securities is the FTSE Global All Cap Universe with 7900 constituents;
    2. FTSE screens the eligible universe to include only companies in ICB Supersector Real Estate, ICB Subsector Heavy Construction, or ICB Subsector Home Construction. Additional companies may be included with guidance from the European Public Real Estate Association (EPRA), the US National Association of Real Estate Investment Trusts (Nareit) and FTSE’s Regional Advisory Committee consisting of senior market practitioners who are representative of the appropriate sectors of the real estate investment community;
    3. Only companies which derived in the previous full financial year at least 75% of total EBITDA from ownership, trading and development of income-producing real estate are included;
    4. A company must be classified as Rental to be included in the REIT Index. To meet this criteria, a company’s rental revenue from investment properties must be greater than or equal to 70% of total revenue.
    5. Size thresholds for both new and continued membership are applied at each quarterly review (based on a percentage of their respective region’s investable market cap)
    6. A liquidity screen is conducted semi-annually in March and September based on each security’s monthly median daily trading.

    Top ten holdings (%)

    Security name

    Country

    Index weight

    Simon Property Group

    United States

    4.3%

    Prologis

    United States

    3.4%

    Public Storage

    United States

    2.4%

    Welltower Inc.

    United States

    2.1%

    Avalonbay Communities

    United States

    2.1%

    Equity Residential

    United States

    2.0%

    Vonovia SE

    Germany

    2.0%

    Link Real Estate Investment Trust

    Hong Kong

    1.9%

    Digital Realty Trust

    United States

    1.8%

    Ventas Inc

    United States

    1.7%

    Source: FTSE, as at 28 February 2019

    Country weightings (%)

    Country

    Index weight

    United States

    63%

    Japan

    9%

    Britain

    5%

    Germany

    5%

    France

    4%

    Canada

    3%

    Hong Kong

    3%

    Singapore

    2%

    Sweden

    2%

    Belgium

    1%

    Subtotal

    97%

    Source: FTSE, as at 28 February 2019

    Sub industry weightings (%)

    Sub industry

    Index weight

    Retail REITs

    21%

    Residential REITs

    14%

    Office REITs

    14%

    Diversified REITs

    10%

    Real Estate Operating Companies

    9%

    Health Care REITs

    9%

    Industrial REITs

    9%

    Specialized REITs

    9%

    Hotel & Resort REITs

    5%

    Diversified Real Estate Activities

    2%

    Real Estate Development

    0%

    Total

    100%

    Source: FTSE, as at 28 February 2019

    Please don’t hesitate to contact me for any further information about this new product ahead of its launch.

    So that you can advantage of this opportunity pre-register your interest in 'REIT' today - click here

     

    IMPORTANT NOTICE – FOR USE BY FINANCIAL SERVICES PROFESSIONALS ONLY

    This information is prepared in good faith by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’) as the responsible entity and issuer of VanEck Vectors FTSE International Property (Hedged) ETF ARSN 631 508 248 (“the Fund”). Units in the Fund are not currently available. VanEck has lodged an application with ASX for units in the Fund to be admitted to trading status on ASX.

    This information is general advice only about financial products and not personal financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Before making an investment decision investors should read the product disclosure statement and with the assistance of a financial adviser consider if it is appropriate for their circumstances. A copy of the PDS is available from www.vaneck.com.au or by calling 1300 68 38 37.

    This information is believed to be accurate at the time of compilation but is subject to change. VanEck does not represent or warrant the quality, accuracy, reliability, timeliness or completeness of the information. To the extent permitted by law, VanEck does not accept any liability (whether arising in contract, tort, negligence or otherwise) for any error or omission in the information or for any loss or damage (whether direct, indirect, consequential or otherwise) suffered by any recipient of the information, acting in reliance on it.

    The Fund is subject to investment risk, including possible loss of capital invested. REIT invests in international markets. An investment in REIT has specific risks that are in addition to the typical risks associated with investing in the Australian market. These include ASX trading time differences and changes in foreign laws and regulations including taxation. Past performance is not a reliable indicator of future performance. No member of the VanEck group guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from the Fund.

    The Fund is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited or the London Stock Exchange Group companies (‘LSEG’) (together the ‘Licensor Parties’) and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the FTSE EPRA Nareit Developed ex Australia Rental Index AUD Hedged (‘Index’) upon which the Fund is based, (ii) the figure at which the Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with the Fund. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Reference Index to VanEck or to its clients. The Reference Index is calculated by FTSE or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Reference Index or (b) under any obligation to advise any person of any error therein. All rights in the Reference Index vest in FTSE. “FTSE®” is a trademark of LSEG and is used by FTSE and VanEck under license.