One of the great features of an Exchange Traded Fund (ETF) is that they are self-cleaning. This means that the holdings behind the ETF change, as new winners emerge and others fade. The changes to the CoreShares S&P Global Property 40 Index (GLPROP*) is a perfect example.
This ETF was listed in late 2016 and at the time retail REITs were the dominant sector with Simon Property Group (invests mostly in US shopping malls) being the largest holding.
Fast forward to today and that has all changed. Specialised REITs is now the top sector and retail REITs have dropped from 31.5% to 4.53%.
Simon Property Group is still in the top 10 but weighted at 4.5%, down from its earlier weight of 9.07% while Prologis (a US REIT that invests in logistics facilities, with a focus on the consumption side of the global supply chain) has gone from 3.98% to 9.4%.
Specialised REITs include self-storage but data centres make up the largest slice of that sector. So this ETF has, in less than five years, reduced its weighting in retail and increased the weight of tech orientated stocks. We’re seeing more tech in the industrial REIT sector as well as it includes logistics, which are increasingly focussed on e-commerce.
This is why we hold ETFs. They are truly passive – fire and forget. Over time the hot stocks and sectors will come and go and the ETF will adjust accordingly to accommodate these changes.
Below is a chat I had with Chris Rule from CoreShares about this trend. He starts at 14:30.
The Sygnia ETF, SYGP, covers the same index and as such would have the same underlying stocks and weighting.
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