Canadian Money Forum banner

1 - 20 of 40 Posts

·
Registered
Joined
·
10 Posts
Discussion Starter #1
Considering dabbling in a little ZRE; would be a long-term hold so if it drops more, not the biggest issue.
I was thinking about real estate too, given that valuations are pretty good right now. After mass vaccine rollout and the pandemic behind us, it should bounce back. ZRE is a good choice given that it's an equal-weight methodology, so you have no overexposure to one sub-sector. The yield looks pretty attractive too close to 5%. Thanks for bringing this up!
 

·
Registered
Joined
·
3,656 Posts
Considering dabbling in a little ZRE; would be a long-term hold so if it drops more, not the biggest issue.
Last year, I decided we should have some additional real estate exposure (we have Riocan in taxable account and reluctant to sell because of low acb). I put about $5k each of XRE and ZRE into our TFSAs. Problem with these ETFs, is that you get the bad with the good. XRE down 18% and ZRE down 11.75% since this time last year. Even at current low REIT valuations, yields (4.75-5%) are not much better than the banks (4-5.25%) , so why buy REIT ETFs? Will they bounce back soon? Seems unlikely given the headwinds for many REITs and the less than stellar yields.

I hate to sell XRE/ZRE given the losses incurred. But that may be the smart thing to do. Perhaps replace with banks or utilities or aristocrats with history of dividend growth???? Good ideas welcomed!
 

·
Registered
Joined
·
18,936 Posts
You're thinking sh*t will hit the fan with all this right wing extremist turmoil?
No, has nothing to do with that. This is what I am required to purchase to maintain my asset allocation. I'll be buying some stocks too, but these were the major purchases.

Just standard asset allocation, nothing special.
 

·
Super Moderator
Joined
·
1,994 Posts
Here's a new thread. The previous one is here:

 

·
Registered
Joined
·
3,936 Posts
This market is nuts.

Been buying FTS and BCE...

I can't wrap my head around anything else right now.
 

·
Registered
Joined
·
3,936 Posts
Good "choice" ;)

I own quite a bit of them, too.
 

·
Registered
Joined
·
4,194 Posts
So you've decided to decrease your fixed income and increase your equity asset allocations.

ltr
I think I already previously posted my plan of not buying any fixed yielding less than 2%. Too much risk.

I have had very good tolerance for volatility so don't suffer from sell off fever.

(And I prefer to drink Don Julio 1942 rather than Jose Cuervo in my fading years)
 

·
Registered
Joined
·
18,936 Posts
So far in 2021, I've been buying XRE, XBB, and ARKG.
XRE is an interesting one for sure. Over 18 years it has performed at 8.9% CAGR (total return including distributions) which is very strong. That suggests this is a legit asset class with good long term returns.

You're also buying it 20% below its recent peak, so that probably is a fine entry point to buy more.
 

·
Registered
Joined
·
35 Posts
XRE is an interesting one for sure. Over 18 years it has performed at 8.9% CAGR (total return including distributions) which is very strong. That suggests this is a legit asset class with good long term returns.

You're also buying it 20% below its recent peak, so that probably is a fine entry point to buy more.
As someone who follows the advice of others(in spite of warnings of due diligence) I have owned VRE for years and still do. However I have to wonder if demand for office space is permanently diminished due to how well we have adapted to working from home. Does this not play a role in the REIT performance going forward?
 

·
Registered
Joined
·
3,656 Posts
As someone who follows the advice of others(in spite of warnings of due diligence) I have owned VRE for years and still do. However I have to wonder if demand for office space is permanently diminished due to how well we have adapted to working from home. Does this not play a role in the REIT performance going forward?
I am sure it does. I have talked to business owners who have decided not to renew their leases or at least reduce the space rented. I have also talked to an employee of a large company who is in involved in the process of renting space in a new office tower. They are not filling that space at the rate they would like.

In time, this may change, but many see a new model of at least in part, having employees work from home.

My feeling is that office space (and retail) REITs will affect the performance of REIT ETFs going forward. Some individual reits might do quite well. But choosing those requires a talent in stock-picking that I don't have :(
 

·
Registered
Joined
·
10 Posts
Discussion Starter #20
XRE is an interesting one for sure. Over 18 years it has performed at 8.9% CAGR (total return including distributions) which is very strong. That suggests this is a legit asset class with good long term returns.

You're also buying it 20% below its recent peak, so that probably is a fine entry point to buy more.
I am bullish on the REIT space as well. I was looking at the top options for this and the final battle was between ZRE and XRE.

What I noticed was that the fees are equal for both at 0.61%.

However ZRE has outperformed its competitor by 2.6% annualized for the past 5 years period, that's a cumulative 13%. After looking into it, guess what - the BMO one is an equal weight, which is a bit of both worlds between pure passive exposure and a little bit of active, keeping limits to different subsectors within the REIT space, which translates into its outperformance. XRE is pure passive market cap index.
 
1 - 20 of 40 Posts
Top