3 REIT ETFs For Passive Income Seekers 
2022-03-26 18:55:08
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Increasing inflation levels have put US Real Estate Investment Trusts (REITs) in the spotlight. These trusts distribute 90% of their annual taxable income as dividend payments, providing a reliable source of liquidity for investors.

REITs are also an alternative way to own real estate without the hassle of buying and managing multiple physical properties. Therefore, many passive income seekers include them in long-term portfolios.

Today’s article introduces three exchange-traded funds (ETFs) that could appeal to a range of readers.

1. First Trust S&P REIT Index Fund

  • Current Price: $30.31
  • 52-week range: $24.57 - $32.83
  • Dividend yield: 1.55%
  • Expense ratio: 0.50% per year

Our first fund, the First Trust S&P REIT Index Fund (NYSE:FRI), invests in a range of REITs in the US. The fund started trading in May 2008.

FRI Weekly ChartFRI Weekly Chart

FRI, which tracks the S&P US REIT Index, has 151 holdings. Specialized REITs, which typically include leisure facilities, such as movie theaters or casinos, outdoor advertising areas, or farmland, amount to 22.61% of the fund. Then come residential REITs (20.01%), industrial REITs (16.31%), and retail REITs (14.17%), among others.

The top 10 names in the portfolio account for close to 40% of $224.4 million in net assets. Leading holdings include the logistics and warehouse REIT Prologis (NYSE:PLD); digital infrastructure name Equinix (NASDAQ:EQIX); self-storage facilities REIT Public Storage (NYSE:PSA); and shopping and entertainment REIT Simon Property (NYSE:SPG).

Buy-and-hold investors could regard the recent dip as an opportunity to buy into FRI. The ETF is down 7% this year but still up over 21.6% in the past 12 months. It also hit a record high in late December 2021.

2. Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF

  • Current Price: $37.88
  • 52-week range: $35.35 - $43.50
  • Dividend yield: 1.37%
  • Expense ratio: 0.60% per year

Next up on our list is the Pacer Benchmark Data & Infrastructure Real Estate SCTR (NYSE:SRVR), which exposes global REITs operating in the data and infrastructure sector. As data usage grows, there is more demand for networking equipment facilities. As a result, this niche fund has been getting significant attention lately. Since its inception in May 2018, assets under management have reached $1.3 billion.SRVR WeeklySRVR Weekly

SRVR, which tracks the Kelly Data Center & Tech Infrastructure Index, has 24 holdings. The top 10 names comprise close to three-quarters of net assets.

Around half of the REITs are classified as ‘Tech Infrastructure: Telecommunications.’ Then come ‘Data Infrastructure’ REITS (39.68%), followed by ‘Tech Infrastructure: General’ REITs (10.93%).

American Tower (NYSE:AMT), Equinix, Crown Castle International (NYSE:CCI), and SBA Communications (NASDAQ:SBAC) head the names on the roster.

The fund is down 12.5% year-to-date but still up over 6% in the past 52 weeks. Like our previous fund, SRVR also saw an all-time high at the end of December 2021. We believe this segment of the REIT universe could belong in long-term portfolios.

3. Global X SuperDividend REIT ETF

  • Current Price: $9.07
  • 52-week range: $8.43 - $10.34
  • Dividend yield: 6.62%
  • Expense ratio: 0.58% per year

Our last fund for today, the Global X SuperDividend® REIT ETF (NASDAQ:SRET), invests in 30 high-yielding global REITs. The fund became available in March 2015, and net assets stand at $387.5 million.

SRET WeeklySRET Weekly

SRET gives access to mortgage REITs (38.35%), health care REITs (15.84%), and diversified REITs (15.81%), among others. Over half of these REITs come from the US. Next, we see names from Singapore, Canada, and Australia.

Australian Charter Hall Long WALE REIT (ASX:CLW), Singapore-based Mapletree North Asia Commercial Trust (SI:MAPE), Canadian SmartCentres Real Estate Investment Trust (OTC:CWYUF), and net lease REIT W P Carey (NYSE:WPC) lead the names on the roster.

SRET saw a 52-week high in June 2021. However, it has lost 4.6% since January and 3.5% in the past 12 months. Passive income seekers interested in global REITs should research the fund further.

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