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Global X SuperDividend REIT ETF: A Potential Safe Haven For An 8% Yield

Published Tue, 15 Sep 2020 03:28:07 -0400 on Seeking Alpha

Seeking AlphaETF Analysis | Financials Global X SuperDividend REIT ETF: A Potential Safe Haven For An 8% YieldSep. 15, 2020 3:28 AM ET|| About: Global X SuperDividend REIT ETF (SRET)by: Brant Munro, CFABrant Munro, CFA Value, Growth At Reasonable Price, long-term horizon, event-drivenLinked In Profile.cls-1{fill:#024999;}SummaryREITs tend to provide stable yields to protect wealth, which is important given impending inflation that will likely result with quantitative easing measures.
SRET provides strong diversification among equity and mortgage REITs.
It also holds many undervalued REITs, most notably agency mREITs, but exposure to commercial mortgages may limit upside in the near term.

I have written a few articles on various REITs in recent weeks, including Chartwell Retirement Residences (OTC:CWSRF) and Boardwalk REIT (OTCPK: BOWFF), and the Vanguard Real Estate ETF (VNQ) for those who would prefer an ETF versus cherry-picking of individual REITs. My main thesis is that most REITs provide a reasonably safe yield, as REITs utilize long-term contracts with tenants, which tends to make their distributions relatively stable. This is necessary to protect one's wealth due to potentially runaway inflation as a result of quantitative easing measures being taken by central banks through the global pandemic. REITs will also be beneficiaries of the quantitative easing in the near term with low interest rates and, therefore, low cost of debt, as they tend to utilize more leverage than most companies.
Most articles I have published have been on equity REITs, which is an intuitively easier business to understand, as those companies utilize a high degree of leverage and buy different properties and lease them out to the appropriate business that require their use. The ETF I want to discuss in this article does have many well-regarded equity REITs and has typically has 40-50% of its portfolio in these types of REITs. Mortgage REITs, or "mREITs," make... Read more