How Senior Housing and Warehouses Defend Monthly Payouts Today
The First Trust S&P REIT Index Fund (NYSEARCA:FRI) gives investors exposure to American commercial real estate cash flow without picking between malls, warehouses, and senior living towers.
FRI's dividend fell 10% last year, but here's why income investors shouldn't panic
First Trust S&P REIT Index Fund (NYSEARCA:FRI) tracks the S&P United States REIT Index and passes through rental cash flow from roughly 140 publicly traded landlords.
FRI: Real Estate ETF With Some Exclusions And A High Fee
First Trust S&P REIT Index Fund ETF offers capital-weighted exposure to U.S. real estate, excluding tower, timber REITs, and real estate services. The FRI ETF has better valuation ratios and growth rates than VNQ but has slightly underperformed since 2007 due to higher fees. FRI has outperformed large competitors in 2024 but ranks average in performance since 2015.
The State Of REITs: September 2024 Edition
REITs extended their winning streak into August with a +2.11% average total return and are now +6.97% thus far in 2024. Large cap (+5.27%), mid-cap (+3.51%) and small cap REITs (+0.84%) averaged gains in August. Micro caps (-3.03%), however, finished August in the red. 68.39% of REIT securities had a positive total return in August.
REITs Are Still Undervalued Despite Recent Outperformance
REITs have outperformed the broader market since early July, prompting a valuation check to ensure they haven't become overvalued. Using a bottom-up methodology, REITs trade at a market cap weighted AFFO multiple of 19.87X, cheaper than the S&P's 21.0X forward P/E. REITs offer higher revenue growth and profit margins compared to the S&P, positioning them for potential outperformance.
