INVESTOR INFORMATION

THE ASSET CLASS

 

Global REITs (GREITs) provide an efficient, seamless, convenient, and liquid way to invest in companies that own properties across the globe. These properties include sectors that are not always available in the local market or in the private markets such as logistics, life science, self-storage, residential communities, and data centres.

They provide a tax-efficient means of distributing rental income to shareholders and having access to REITs globally means that a portfolio is diversified, not only geographically and through currency, but also through the various sectors that are available.

Why invest in REITs

REITs historically have delivered competitive total returns. This is based on high, steady dividend income and long-term capital appreciation.

Their comparatively low correlation with other asset classes also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.

REITs have the following characteristics:

  • Liquidity
  • Diversification
  • Dividends
  • Transparency
  • Performance

Liquidity:

REITs have historically provided:

•            Ability to buy/sell like other stocks, mutual funds, and ETFs.

•            Opportunities for tactical asset allocation.

•            Easy portfolio rebalancing.

Diversification

REITs have historically provided:

•            Low correlation with other stocks and bonds.

•            Higher risk-adjusted returns.

•            An investment in real, tangible assets.

Transparency:

It would be extremely difficult for REIT management to hide accounting irregularities for an extended period, as this would eventually affect their ability to pay out their required dividends.

Coupled with this is the fact that REITs are under inspection from analysts and underwriters that would soon pick up on any misnomers. REITs are publicly traded firms and therefore face a high degree of scrutiny. In the United States alone there are 30 firms that provide real estate equity research. REITs are not immune to scandals, but the structure of REITs reduce the probabilities of fraud significantly.

Dividends:

REITs have historically provided:

•            Dividends & wealth accumulation.

•            Regular income from rents.

•            Reduced portfolio volatility.

Performance:

REITs have historically provided:

•            Total returns above the S&P 500 over the past 25 years.

•            Higher returns than corporate bonds.