SA REIT ETFs
Back in February we cover offshore property ETFs listed in the JSE and the local SA property (REIT) ETFs and it was ugly locally. At the time we commented that we were seeing the early days of a move higher and it has continued. Dividend yields are better but this is a much smaller and less diverse sector. Locally it really is all about office, retail and industrial (logistics) with a small bit of of residential and storage.
The Satrix and 1nvest are largely the same in that they track a local index (Satrix using the S&P version which is capped at 10% for any stock). The 10x Investments uses a bespoke methodology that uses dividend yield to weight stocks. This ETF came about as then managers, CoreShares, merged two of their REIT ETFs, a generic SAPY ETF and a top ten equal weighted ETF into this one new REIT ETF.
The yields are all a little lower since February as prices have moved up faster then dividends, but they’re still decent.
We also have a look at income REITs and Bond ETs from 1nvest here.
Name |
Code |
TER |
DY |
Details |
| 1nvest SA Property | ETFSAP | 0.29% | 5.8% (quarterly) | Track the SA Listed Property Index (SAPY), as closely as possible. |
| 10X SA Property Income | CSPROP* | 0.43% | 6.7% (quarterly) | The SA Property Income Index is designed to measure the performance of large SA REITs with an emphasis on higher yielding companies. |
| Satrix SA Property | STXPRO* | 0.33% | 7.3% (quarterly) | Track the value of the S&P SA Composite Property Capped Index. |
The one year returns (excluding dividends) as below are excellent and even more attractive if you add in the dividend yields.
I do like local property, yes office remains under pressure, but aside from that valuations are decent with good discounts to net asset value (NAV), decent yields and improved loan to value (LTV) levels. I have been holding REIT ETFs for a while and finally it’s time to be smiling.
With the higher, and taxable, yields they also make a great inclusion into your tax-free account to avoid that tax.
BUT, there are concerns I interviewed Daniel King: Merchant West Investments back in February and he’s cautious.
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
