Canadian REITs ETF

Top 5 Best Canadian REITs ETF in 2021

In this post, we will compare the best Canadian REITs ETF available in Canada. First, we will discuss the benefits of owning this type of investments. Then, for each ETF, we will provide the fund’s objective, MER, holdings, historical performance and dividend distribution.

What’s a REIT

Real estate investment trusts are companies that owns, operates, or finances income-generating real estate. REITs can invest in various type of properties such as: apartment buildings, data centers, hotels, medical facilities, offices, retail centers, cell towers and warehouses.

 REITs can be privately owned, but most are publicly traded. Investors can easily invest in a real estate investments trusts by purchasing its stock on the Toronto stock exchange. Canadian REITs are popular for various reasons:

  • They offer diversification to an existing investment portfolio. Real estate assets are unique and have generally low correlation with other types of existing assets;
  • They are considered to be a natural hedge against inflation;
  • They offer a steady and stable income. REITs revenues come mostly from rent paid by occupants of their buildings and properties. This type of revenues is quite stable compared to any other type of commercial activity.

What’s an REIT ETF

It’s an exchange trader fund that invests primarily in a portfolio of REITs. The manager of the ETF can either track a REIT index, pursue an active strategy or a mix of both.

Canadian REITs ETF are great as they offer a low cost way to get exposure to large number of REITs. The holder of a REIT ETF can benefit from diversification which lowers the overall risk.

What to look for in a REIT ETF

When looking for the Best Canadian REITs ETF, please make sure to check for the criteria’s below:

  • Sector allocation matters in REIT ETF. Investors should check whether the ETF invests in various sectors. The idea is to avoid REITs that are overly exposed to one type of properties. Generally speaking, a mix of industrial, retail and residential is appreciated.
  • Yield distribution;
  • Performance;
  • Management expense ratio.

Table 1: Canadian REITs ETF list

NameAUMDiv
Yield 
IDR – Middlefield REIT
Indexplus
1085.71
RIT – CI First Asset
Canadian REIT
7533.99
ZRE – BMO Equal
Weight Reits Index
7894.00
XRE – Ishares S&P TSX
Capped REIT Index
1,4242.74
VRE – Vanguard FTSE CDN
Capped REIT Idx
3302.89
Soure: Barchart September 14th

Table 2: MER Comparison

SymbolMER6M3 yrs5 yrs
 IDR0.9824.5610.9710.10
 RIT0.8625.5211.7011.13
 ZRE0.6123.8612.1712.07
 XRE0.6122.849.119.24
 VRE0.3821.588.618.89
Source: yahoo finance August 31st, YTD: Year to date

ZRE – BMO Equal Weight Reits Index and RIT – CI First Asset Canadian REIT had the best historical performance (3 years and 5 years)

VRE Vanguard FTSE CDN ​​Capped REIT Index has the lowest management expense ratio of the ETFs analyzed. The short-term performance of VRE is also the highest.

 

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IDR – Middlefield REIT Index plus ETF

IDR has been designed to provide investors with low-cost exposure to the global real estate sector through a combination of indexing and active portfolio management.

65% of the funds’ assets are invested in the Canadian market (34% in the United states and 2% International).

IDR ETF Distribution

RECORD DATEPAYMENT DATEPAYMENT AMOUNT
June 30, 2021July 15, 2021$0.075
May 31, 2021June 15, 2021$0.075
April 30, 2021May 14, 2021$0.075
March 31, 2021April 15, 2021$0.075
February 28, 2021March 15, 2021$0.075
January 31, 2021February 12, 2021$0.075

IDR ETF Holdings


TOP 10 HOLDINGS
Canadian Apartment Properties REIT
SmartCentres Real Estate Investment Trust
First Service Corp
RioCan Real Estate Investment Trust
Granite Real Estate Investment Trust
Prologis Inc First Capital Real Estate Investment Trust
Welltower Inc Colliers International Group Inc
WPT Industrial Real Estate Investment Trust
(As of March 31, 2021)

IDR ETF Sector allocation

Name
Weight %
Industrial REITs24.4
Retail REITs19.5
Residential REITs18.6
Real Estate Services7.9
Specialized REITs6.9
Healthcare REITs6.7
Office REITs5.9
Diversified REITs4.4
Asset Management & Custody Banks2.9
Hotels, Resorts & Cruise Lines2.8

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RIT – CI First Asset Canadian REIT ETF

RIT is an actively managed portfolio comprised primarily of securities of Canadian real estate investment trusts, real estate operating corporations and entities involved in real estate related services. Up to 30% of the Fund’s assets may be invested in foreign securities.

RIT ETF Distribution

RITTotalCash
21-May$0.0675$0.0675
26-Apr$0.0675$0.0675
25-Mar$0.0675$0.0675
22-Feb$0.0675$0.0675
25-Jan$0.06750$0.0675

Sector breakdown

SectorWeight %
Residential30.73
Industrials21.07
Retail18.64

 

RIT ETF Holdings

Name%
CANADIAN APARTMENT PPTYS REIT4.96
TRICON RESIDENTIAL INC4.88
DREAM INDUSTRIAL REIT4.87
SUMMIT INDUSTRIAL INCOME REIT4.70
INTERRENT REIT4.68
GRANITE REIT4.62
KILLAM APT REAL ESTATE INVT TR4.21
MINTO APARTMENT REIT4.06
CHARTWELL RETIREMENT RESIDENCE4.01
CHOICE PROPERTIES REIT3.74

ZRE – BMO Equal Weight Reits Index ETF

ZRE is an index fund that tracks the Solactive Equal Weight Canada REIT Index. It invests in Canadian securities that fall within the Real Estate Investment Trust sector. Each security in the Index is allocated a fixed weight rather than a market capitalization weight. This is the largest REITS ETF by asset under management with 1.3 Billion.

Sector allocation

SectorWeight %
Retail27.87%
Residential21.94%
Industrial18.55%
Diversified13.63%
Office8.90%

ZRE ETF Holdings

Weight (%)Name
4.98%WPT INDUSTRIAL REAL ESTATE INVESTMENT TRUST
4.96%SUMMIT INDUSTRIAL INCOME REIT
4.76%CROMBIE REAL ESTATE INVESTMENT TRUST
4.63%SMARTCENTRES REAL ESTATE INVESTMENT TRUST
4.63%RIOCAN REAL ESTATE INVESTMENT TRUST
4.61%INTERRENT REAL ESTATE INVESTMENT TRUST
4.61%CHARTWELL RETIREMENT RESIDENCES
4.59%MINTO APARTMENT REAL ESTATE INVESTMENT TRUST
4.58%CHOICE PROPERTIES REAL ESTATE INVESTMENT TRUST
4.57%H&R REAL ESTATE INVESTMENT TRUST

VRE – Vanguard FTSE CDN Capped REIT Index ETF

VRE Seeks to track the performance of the FTSE Canada All Cap Real Estate Capped 25% Index (before fees and expenses). It provides exposure to Canadian large-, mid-, and small-cap stocks in the Real Estate industry.

Vanguard FTSE CDN Capped REIT Index ETF has the lowest MER among the ETFs selected for this post.

VRE ETF Holdings

As of May 31st

Holding name% Weight
Canadian Apartment Properties REIT(CAR.UN)15.23
FirstService Corp.(FSV)11.57
RioCan REIT(REI.UN)10.91
Allied Properties REIT(AP.UN)8.76
Granite REIT(GRT.UN)7.63
H&R REIT(HR.UN)7.29
Colliers International Group Inc.(CIGI)6.48
First Capital REIT(FCR.UN)6.25
SmartCentres REIT(SRU.UN)6.18
Choice Properties REIT(CHP.UN)6.05

Sector allocation

SectorFund
Retail REITs23.2%
Office REITs19.6%
Real Estate Services18.1%
Residential REITs17.7%
Diversified REITs9.0%
Industrial REITs7.7%
Real Estate Holding and Development4.6%
Total100.0%

VRE ETF Distribution

Distribution frequency: Monthly

Ex-dividend
date
Payable
date
Cash
distribution
28 May 202107 Jun 2021$0.087805
30 Apr 202110 May 2021$0.087805
31 Mar 202109 Apr 2021$0.087805
26 Feb 202108 Mar 2021$0.087805
29 Jan 202108 Feb 2021$0.087805

XRE – iShares S&P/TSX Capped REIT Index ETF

Seeks to provide long-term capital growth by replicating the performance of the S&P/TSX Capped REIT Index, net of expenses.

XRE ETF Holdings

NameWeight %
CANADIAN APARTMENT PROPERTIES REAL15.27
RIOCAN REAL ESTATE INVESTMENT TRUS10.38
ALLIED PROPERTIES REAL ESTATE INVT8.81
GRANITE REAL ESTATE INVESTMENT STA7.77
HANDR REAL ESTATE INVESTMENT TRUST7.06
CHOICE PROPERTIES REAL ESTATE INVE5.97
FIRST CAPITAL REALTY REAL ESTATE I5.88
SMARTCENTRES RL ESTATE INVESTMENT5.73
SUMMIT INDUSTRIAL INCOME REIT UNIT4.01
DREAM INDUSTRIAL REAL ESTATE INVES3.61
as of Jun 17, 2021

Sector allocation

TypeFund
Retail REIT’s32.24
Residential REIT’s24.26
Industrial REIT’s18.27
Diversified REIT’s11.64
Office REIT’s10.18
Health Care REIT’s3.26
Cash and/or Derivatives0.16

Disclaimer

The data on this website is for your information only. It does not constitute investment advice, or advice on tax or legal matters. Any information provided on this website does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell shares or units in any of the investment funds or other financial instruments described on this website. Should you have any doubts about the meaning of the information provided herein, please contact your financial advisor or any other independent professional advisor.