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IYR: Cost Of Capital Only Comes Down In Adverse Economic Scenario
To begin with, we are not major fans of ETFs of REITs, since REITs themselves are already asset portfolios and more layering is unnecessary and costly at 0.4% expense ratio. IYR is underperforming because of high costs of capital, and we think high or even higher costs of capital are the status quo for the foreseeable future. An adverse economic scenario could bring down costs of capital, which would be a net positive only for some of the REITs in IYR, with others being exposed on demand-side.
Seekingalpha | 2 years ago
