Let’s analyze in detail 3 ETFs, the worst in their category last year, which actually projected significant growth in 2024.
According to Statista, the global real estate market is projected towards significant expansion in the coming years, with forecasts indicating a total value reaching $637.80 trillion.
This upward trend is particularly evident in the residential real estate sector, which is expected to dominate the market with an estimated volume of $518.90 trillion over the same period. This forecast is fueled by a variety of factors, including growing housing demand and investment in the sector.
The rise of the real estate market does not appear to be stopping in the short term, with an expected annual growth (CAGR 2024-2028) of 3.41%. This sustained growth rate promises to drive the overall market value to reach $729.40 trillion by 2028, underlining the strategic importance and economic attractiveness of this sector.
As the real estate market extends on a global scale, it is interesting to note that a significant portion of this value will be generated in China, with forecasts estimating an impressive volume of $135.70 trillion in 2024. This highlights the predominant role of the Chinese economy in shaping the global real estate market landscape and suggests unique opportunities and challenges for investors and industry players.
In this perspective of growth and change, the detailed analysis of Exchange Traded Funds (ETF) related to the real estate sector becomes essential for investors seeking to navigate this dynamic environment.
1) iShares Asia Property Yield UCITS ETF
The iShares Asia Property Yield UCITS ETF, the largest and most affordable of the three, offers exposure to Asian property investments through tracking the FTSE EPRA/NAREIT Developed Asia Dividend+ Index. Its total physical replication strategy, based on the purchase of all components of the underlying index, ensures close alignment with market performance. With a TER of 0.59% per annum, the ETF seeks to provide an acceptable balance between costs and returns.
Over the past year, the ETF has undercome significant pressure, declining 10.29%. The annual volatility of 12.15% suggests relatively low stability in the short term. The quarterly dividend distribution, with a current yield of 3.97%, could be an attractive factor for income-oriented investors.
The management of assets of approximately €290 million since its launch in 2006 highlights the solidity of the ETF, which has tax domicile in Ireland.
The top 10 holdings show a high concentration in countries such as Japan (45.57%), Singapore (17.06%), Hong Kong (16.55%) and Australia (15.97%). This geographic diversification could help mitigate specific risks related to a single market.
2) iShares UK Property UCITS ETF EUR Hedged (Acc)
The iShares UK Property UCITS ETF EUR Hedged (Acc) features currency hedging, offering protection against currency fluctuations. However, with assets under management of just €12 million and a launch in May 2022, it is considered a small and relatively young ETF on the market.
The TER of 0.42% per year makes it quite competitive, but the ETF has posted a negative return of 6.97% over the past year, raising questions about its ability to generate positive returns in unfavorable market conditions. Investors should pay attention to the dividend accumulation policy, which may not be suitable for those seeking regular returns. The volatility of 24.48% suggests a higher level of uncertainty than the iShares Asia Property Yield ETF.
The geographic concentration of the portfolio shows significant affinity with the UK, which accounts for 94.04% of the top 10 holdings.
3) BNP Paribas Easy FTSE EPRA Nareit Developed Europe ex UK Green UCITS ETF
The BNP Paribas Easy FTSE EPRA Nareit Developed Europe ex UK Green UCITS ETF focuses on sustainable European real estate companies, excluding the UK. The weighting of companies is based on sustainability criteria, such as the certification of "green" construction and the use of renewable energy.
With a TER of 0.40% per annum, the ETF aims to offer a balance between sustainability and returns. However, the negative performance of 7.34% over the past year may raise questions about its resilience in adverse market conditions. The high volatility of 27.30% suggests greater risk.
Sustainability-minded investors might consider this option, but should be aware of the associated risks. The management of assets of approximately €115 million and the ETF structure offer a solid foundation, but the monthly returns and the 1-year risk overview show a mixed performance.
In conclusion, each ETF has unique characteristics and specific risks. Investors should carefully consider their needs and risk profile before committing to any of these financial instruments.
|Disclaimer
The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings.|
Original article published on Money.it Italy 2024-01-19 16:53:01. Original title: 3 ETF sul mercato Real estate da monitorare nel 2024
