The Lemon Fool

Is there an ETF or Investment Trust that invests in a portfolio of high yielding REIT's or property funds? A kind of "fund of funds".

I'm looking for exposure beyond the UK and don't feel confident about investing in a single REIT at this time.

Thanks

bailey

bailey56 wrote:Is there an ETF or Investment Trust that invests in a portfolio of high yielding REIT's or property funds? A kind of "fund of funds".

There are a few ETFs around. Try a search for ETF property funds.

This one for example from a well known providers of ETFs
https://www.ishares.com/uk/individual/e ... -ucits-etf

There are some Investment Trusts specialising in property according to AIC classification, but these prefer to hold property directly and are probably REITs anyway.

Hi bailey56

For my passive portfolio exposure to property, I invest in the iShares FTSE EPRA/NAREIT Developed Market Property Yield etf (ticker: IWDP). Not particularly high yielding (2.96% according to HL) though - pays quarterly.

Hope that helps, cheers, OLTB.

Hi OLTB and Alaric,

Many thanks for your replies. It looks like ETF's are the only pool of REIT's available.

Regards

bailey

bailey56 wrote:Is there an ETF or Investment Trust that invests in a portfolio of high yielding REIT's or property funds? A kind of "fund of funds".

I'm looking for exposure beyond the UK and don't feel confident about investing in a single REIT at this time.

Thanks

bailey

TR Property Investment Trust (TRY) seems to fit the bill and is not itself a REIT (thereby avoiding the little complication about taxing "PIDs"). 2.8% yield, 9.6% dividend growth over the last five years. Majority of holding are in Continental Europe.
https://www.theaic.co.uk/companydata/337

FredBloggs wrote:Given that the likes of British Land, Land Securities are diverse multi billion GBP portfolios themselves, how much diversification do you want or need in a REIT?

Ideally I was looking for more global exposure. Or maybe more diverse holdings, such as student accommodation, care homes, hospitals, residential, warehousing etc. As far as I know, British Land and Land Secs are largely UK office and retail.

Thanks

bailey

tieresias wrote:

bailey56 wrote:Is there an ETF or Investment Trust that invests in a portfolio of high yielding REIT's or property funds? A kind of "fund of funds".

I'm looking for exposure beyond the UK and don't feel confident about investing in a single REIT at this time.

Thanks

bailey

TR Property Investment Trust (TRY) seems to fit the bill and is not itself a REIT (thereby avoiding the little complication about taxing "PIDs"). 2.8% yield, 9.6% dividend growth over the last five years. Majority of holding are in Continental Europe.
https://www.theaic.co.uk/companydata/337

Thank you! I shall take a look.

bailey

bailey56 wrote:

FredBloggs wrote:Given that the likes of British Land, Land Securities are diverse multi billion GBP portfolios themselves, how much diversification do you want or need in a REIT?

Ideally I was looking for more global exposure. Or maybe more diverse holdings, such as student accommodation, care homes, hospitals, residential, warehousing etc. As far as I know, British Land and Land Secs are largely UK office and retail.

Thanks

bailey

You could look at DIGS (GCP Student Property) for student accommodation and PHP (Primary Healthcare Properties) for GPs' surgeries. SGRO covers warehousing. Residential property used to feature in some funds. I don't know if it still does.

TJH

tjh290633 wrote:
You could look at DIGS (GCP Student Property) for student accommodation and PHP (Primary Healthcare Properties) for GPs' surgeries. SGRO covers warehousing. Residential property used to feature in some funds. I don't know if it still does.

TJH

Yes, there is also Target Healthcare (THRL) for care homes. I may end up buying a little of each. Thanks Terry.

bailey

Not that I can suggest any answers to the question, but I note the OP was seeking global property exposure, whereas many of the replies are suggesting UK property REIT's.

bailey56 wrote:I'm looking for exposure beyond the UK and don't feel confident about investing in a single REIT at this time.

bailey56 wrote:Ideally I was looking for more global exposure. Or maybe more diverse holdings, such as student accommodation, care homes, hospitals, residential, warehousing etc. As far as I know, British Land and Land Secs are largely UK office and retail.

So, apologies, I don't know of any suitable global property funds, perhaps other than perhaps what some of the global or regional IT's hold, or perhaps TRY which has a European focus.

In terms of the specialist/more diverse (though still UK focused) property IT's, there is a list of possibles here:
http://citywire.co.uk/money/investment- ... ePeriod=12

richfool wrote:So, apologies, I don't know of any suitable global property funds, perhaps other than perhaps what some of the global or regional IT's hold, or perhaps TRY which has a European focus.

For an ETF to operate, there needs to be an index for it to track or replicate. The same may apply to an IT if it feels a need to have a benchmark to navigate by. Both the ETF and the IT mentioned above follow the same index.

If you want global coverage in property, you could consider a tracker fund like this:

https://www.blackrock.com/uk/individual ... individual

Not particularly high yield, but I think there is an income version that pays out dividends.

Ongoing charge is lowish at 0.57%

FD

tieresias wrote:... is not itself a REIT (thereby avoiding the little complication about taxing "PIDs"). ...

Do bear in mind the fact that there are two little complications about taxing "PIDs". One is unpleasant and easily visible to the shareholder: the fact that they're taxed at regular income rates on PIDs rather than at the lower dividend income rates. The other is pleasant but concealed from the shareholder: the fact that the REIT is exempt from Corporation Tax on the profits that fund PIDs.

When the shareholder is subject to Income Tax, the unpleasant aspect generally cancels out quite a lot of the pleasant one, but by no means all of it, since Corporation Tax rates are generally higher than the differences between regular and dividend Income Tax rates. When they're not, such as for a holding of REIT shares in an ISA or other tax shelter, one only gets the pleasant aspect - no Corporation Tax on the profits that fund PIDs and no Income Tax on the PIDs is hard to beat for tax-efficiency!

Gengulphus

Here is an article cataloguing the lowest cost tracker funds:

http://monevator.com/low-cost-index-trackers/

The lowest cost global property tracker is given as:

L&G Global Real Estate Dividend Index I (GB00BYW7CN38) OCF 0.2%

The runners up are:

iShares Global Property Securities Equity Index Fund D (GB00B5BFJG71) OCF 0.22%

Amundi ETF FTSE EPRA/NAREIT Global ETF (EPRA) OCF 0.24%

SPDR Dow Jones Global Real Estate ETF (GBRE) OCF 0.4%

Gengulphus wrote:

tieresias wrote:... is not itself a REIT (thereby avoiding the little complication about taxing "PIDs"). ...

Do bear in mind the fact that there are two little complications about taxing "PIDs". One is unpleasant and easily visible to the shareholder: the fact that they're taxed at regular income rates on PIDs rather than at the lower dividend income rates. The other is pleasant but concealed from the shareholder: the fact that the REIT is exempt from Corporation Tax on the profits that fund PIDs.

When the shareholder is subject to Income Tax, the unpleasant aspect generally cancels out quite a lot of the pleasant one, but by no means all of it, since Corporation Tax rates are generally higher than the differences between regular and dividend Income Tax rates. When they're not, such as for a holding of REIT shares in an ISA or other tax shelter, one only gets the pleasant aspect - no Corporation Tax on the profits that fund PIDs and no Income Tax on the PIDs is hard to beat for tax-efficiency!

Gengulphus

Do you know if the PIDs from REITs held in ETFs, such as IUKP, are paid gross, and therefore this tax efficiency is not lost?

theta wrote:Do you know if the PIDs from REITs held in ETFs, such as IUKP, are paid gross, and therefore this tax efficiency is not lost?

I get the impression that PIDs from REITs are usually paid net. Would ETFs be any different? That means when held in a dealing account by a basic rate taxpayer, the tax is correct. SIPPs and ISA providers should be able to reclaim the tax withheld as would a non-taxpayer.

There is a post about WHR REIT raising additional funds, here:

viewtopic.php?f=87&t=16754&p=207875#p207875

Gengulphus wrote:

tieresias wrote:... is not itself a REIT (thereby avoiding the little complication about taxing "PIDs"). ...

Do bear in mind the fact that there are two little complications about taxing "PIDs". One is unpleasant and easily visible to the shareholder: the fact that they're taxed at regular income rates on PIDs rather than at the lower dividend income rates. The other is pleasant but concealed from the shareholder: the fact that the REIT is exempt from Corporation Tax on the profits that fund PIDs.

When the shareholder is subject to Income Tax, the unpleasant aspect generally cancels out quite a lot of the pleasant one, but by no means all of it, since Corporation Tax rates are generally higher than the differences between regular and dividend Income Tax rates. When they're not, such as for a holding of REIT shares in an ISA or other tax shelter, one only gets the pleasant aspect - no Corporation Tax on the profits that fund PIDs and no Income Tax on the PIDs is hard to beat for tax-efficiency!

Gengulphus

Thanks for this. I was not aware of the exemption from Corporation Tax. My own understanding was that taxes due on PIDs were withheld at source, automatically, at basic income rates. How does that work if the REIT is in a tax sheltered account?

Bushman wrote: My own understanding was that taxes due on PIDs were withheld at source, automatically, at basic income rates. How does that work if the REIT is in a tax sheltered account?

One of two ways, depending on how your broker organises their nominee holdings. If they segregate their nominee accounts to hold all their tax-exempt holdings in one and all their taxable holdings in another, then they can apply to the REIT's registrar for the PIDs to be paid Gross for their tax-sheltered holdings. If taxable and non-taxable holdings are in the same nominee account, then the withheld tax will be reclaimed in due course by your broker from HMRC.

Breelander wrote:

Bushman wrote: My own understanding was that taxes due on PIDs were withheld at source, automatically, at basic income rates. How does that work if the REIT is in a tax sheltered account?

One of two ways, depending on how your broker organises their nominee holdings. If they segregate their nominee accounts to hold all their tax-exempt holdings in one and all their taxable holdings in another, then they can apply to the REIT's registrar for the PIDs to be paid Gross for their tax-sheltered holdings. If taxable and non-taxable holdings are in the same nominee account, then the withheld tax will be reclaimed in due course by your broker from HMRC.

Thank you very much.