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Our Intelligently Diversified High Yield REIT Portfolio Designed For Outperformance

Published Tue, 09 Oct 2018 14:01:39 -0400 on Seeking Alpha

On July 1st 2016, we commenced trading in 2CHYP, our high yield REIT portfolio, with the explicit goal of maximizing total return. This article will detail the holdings of 2CHYP heading into the 4th quarter along with the diversification, high yield and deep value of the portfolio in absolute terms and relative to the index. First, however, I want to discuss why maximizing total returns was chosen as the goal for this portfolio and how intelligent diversification is crucial to achieving this goal.
Total Return Focus Total returns are the Holy Grail of investment.
High yield strategies that lack a total return focus often get most of the dividends from a return of capital. The high initial yield may seem nice at first, but over time the principal erodes and eventually there is not enough capital left to fuel the income the investor was seeking.
Low volatility or low beta strategies seem appealing as the historic stability of value makes it appear less risky. However, historic stability has little bearing on future stability, so low beta or low volatility investments can become high volatility when things change.
Treasuries are low volatility until interest rates spike General Electric was low volatility until its collapse Even if these instruments work as intended, I would argue they do not accomplish an investor’s goal. None will help an investor increase their purchasing power. None of these will help an investor retire comfortably.
Total return is the only... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
WP GLIMCHER 5.40   13.2 0.41 1.00 19.19
CBL & ASSOCIATES PROPERTIES 1.83   0.0 -0.72 0.30 15.71
CORECIVIC 19.19   14.3 1.34 1.76 9.07
RLJ LODGING TRUST 18.19   19.4 0.94 1.32 7.31
IRON MOUNTAIN 35.23   27.7 1.27 2.44 7.08
KIMCO REALTY 18.17   17.8 1.02 1.12 6.36
MEDICAL PROPERTIES TRUST 18.84   6.8 2.76 1.00 5.49
UMH PROPERTIES 14.03   0.0 -1.54 0.72 5.24
STAG INDUSTRIAL 28.93   37.1 0.78 1.43 5.02


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