Canadian REIT ETFs offer attractive investment attributes for real estate investments as they invest in multiple real estate companies that own property at the same time.

This reduces the risk for an investor who only relies on their own property. REIT ETFs also offer investors a good diversification option.

Investing directly in real estate may sound lucrative, but it requires a lot of research and is both time and capital intensive. In addition, one poor choice could lead to all that hard-earned money going the wrong way.

A Canadian REIT ETF, on the other hand, offers an inexpensive way to invest in the real estate asset class. In addition, ETFs are inherently highly liquid and trade as regular stocks on the stock exchange.

Investors not only invest in REITs to benefit from a diversified portfolio, but also because of their lucrative payouts, as REITs have to pay out at least 90% of their income as a payout (difference between payout and dividend).

There are dozens of REITs to choose from that could further confuse an investor. Some REITs are focused while others are diversified (by asset class, investment objective, or region). Since REITs are tied to a specific property class, a Canadian REIT ETF can offer investors a balanced investment option.

Many real estate investors therefore prefer investing through an exchange traded fund because of its low cost, convenience and diversification.

Click here for the MEGA REIT list

Which REIT ETF is good for you?

Investing through an ETF gives investors ownership of dozens of REITs through a single investment and at a reasonable price. Once an investor decides to invest in ETFs, they need to figure out the characteristics that make a good REIT ETF for them.

For example, whether you need a stock REIT or a mortgage REIT, or a combination of both. Few other things for investors to look out for are an ETF’s expense ratio, return, and assets under management. Investors should try to find a balance between higher returns and lower expense ratios.

Canadian REIT ETFs

Here is the list of the most popular Canadian REIT ETFs available.

Below is a brief overview of the 6 REIT ETFs with the Top 10 holdings for each. You can find out what they have in common and decide whether to invest in either the REIT ETF or directly in the best (or most popular) REIT.

VRE – Vanguard FTSE Canadian Capped REIT Index ETF

The Vanguard FTSE Canadian Capped REIT Index ETF tries to track the performance of the FTSE Canada All Cap Real Estate Capped 25% Index.

The index invests primarily in Canadian real estate stocks and the weight of each constituent in the index is capped at 25%. The REITs held are mainly active in the industrial, office, residential and retail sectors.

Top 10 participations:

  1. TSE: CAR.UN Canadian Apartment Properties REIT
  2. TSE: FSV FirstService Corp.
  3. TSE: GRT.UN Granite REIT
  4. TSE: REI.UN RioCan REIT
  5. TSE: AP.UN. Allied Properties REIT
  6. TSE: CHP.UN. Selection properties REIT
  7. TSE: FCR.UN First capital REIT
  8. TSE: HR.UN H&R REIT
  9. Colliers International Group Inc.
  10. TSE: SRU.UN SmartCentres REIT

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

The iShares S & P / TSX Capped REIT Index ETF tracks the performance of the S & P / TSX Capped REIT Index after deducting costs. The ETF’s investment objective is to seek long-term growth. It offers balanced exposure to retail, residential, office and industrial REITs and has monthly payouts.

The ETF was founded in 2002 and is one of the oldest. This ETF has a medium risk rating. The iShares S & P / TSX Capped REIT Index ETF is ideal for investors looking for long-term capital growth as well as a steady stream of monthly income.

Top 10 participations:

  1. TSE: CAR.UN Canadian Apartment Properties REIT
  2. TSE: REI.UN RioCan REIT
  3. TSE: GRT.UN Granite REIT
  4. TSE: AP.UN. Allied Properties REIT
  5. TSE: CHP.UN. Selection properties REIT
  6. TSE: HR.UN H&R REIT
  7. TSE: FCR.UN First capital REIT
  8. TSE: SRU.UN SmartCentres REIT
  9. TSE: NVU.UN Northview Apartment REIT
  10. TSE: SMU.UN Summit Industrial REIT

ZRE – BMO Equal Weight REITS Index ETF

The BMO Equal Weight REITs Index ETF tracks the performance of the Solactive Equal Weight Canada REIT, which consists of Canadian securities from the real estate investment trust sector.

Top 10 participations:

  1. TSE: D.UN. Dream office REIT
  2. TSE: CUF.UN Cominar REIT
  3. TSE: CT.UN CT REIT
  4. TSE: YOU.UN Dream industrial REIT
  5. TSE: AT UN Promenade REIT
  6. TSE: GRT.UN Granite REIT
  7. NorthWest Healthcare Properties REIT
  8. TSE: REI.UN RioCan REIT
  9. TSE: NVU.UN Northview Apartment REIT
  10. TSE: CRR.UN Crombie REIT

RIT – First Asset Canadian REIT Income Fund

First Asset The Canadian REIT Income Fund is an actively managed fund. It primarily invests in REIT stocks, real estate companies, and companies involved in real estate-related services.

The Fund may also invest up to 30% of its Net Asset Value in non-real estate related securities and services. It has monthly distribution guidelines. The aim of the fund is to achieve a total return composed of regular income and long-term capital appreciation.

First Asset Investment Management Inc. has rated the volatility of this ETF as low to medium.

Top 10 participations:

  1. TSE: CAR.UN Canadian Apartment Properties REIT
  2. Tricon Residential
  3. TSE: YOU.UN Dream industrial REIT
  4. TSE: GRT.UN Granite REIT
  5. TSE: KPM.UN. Killam Apartment REIT
  6. TSE: IIP.UN. Interrent REIT
  7. TSE: SMU.UN Summit Industrial REIT
  8. TSE: MI.UN. Minto Apartment REIT
  9. TSE: CHP.UN. Selection properties REIT
  10. TSE: CRR.UN Crombie REIT

CGR – iShare Global Real Estate Index ETF

The iShare Global Real Estate Index ETF tracks the performance of the Cohen & Steers Global Realty Majors Index minus costs.

The ETF offers exposure to 75 listed global real estate companies and global exposure to countries such as the US (55%), Japan (10%), Hong Kong (9%), Australia (6%) and Germany (5%), France , UK, China, Singapore, Canada and others.

The ETF aims to provide investors with long-term capital growth and global exposure to real estate companies. It offers quarterly distributions.

Top 10 participations:

  1. TSE: CAR.UN Canadian Apartment Properties REIT
  2. Tricon Residential
  3. TSE: YOU.UN Dream industrial REIT
  4. TSE: GRT.UN Granite REIT
  5. TSE: KPM.UN. Killam Apartment REIT
  6. TSE: IIP.UN. Interrent REIT
  7. TSE: SMU.UN Summit Industrial REIT
  8. TSE: MI.UN. Minto Apartment REIT
  9. TSE: CHP.UN. Selection properties REIT
  10. TSE: CRR.UN Crombie REIT

PHR – Purpose Duration Hedged Real Estate Fund

Purpose Duration Hedged Real Estate Fund seeks to provide long-term capital growth to its shareholders by investing in a real estate portfolio. This ETF offers exposure to a broad portfolio of Canadian (48% of the portfolio) and US (48% of the portfolio) real estate stocks.

The fund hedges the interest rate risk of its portfolio in order to reduce the portfolio’s sensitivity to rising interest rates. It offers monthly payouts. Purpose Investments Inc. has rated the volatility of this ETF as medium.

Top 10 participations:

  1. WPT Industrial REIT
  2. TSE: GRT.UN Granite REIT
  3. TSE: SRU.UN SmartCentres REIT
  4. TSE: KPM.UN. Killam Apartment REIT
  5. TSE: CRR.UN Crombie REIT
  6. Crown Castle International Corp.
  7. Prologis REIT
  8. European residential REIT
  9. TSE: AP.UN. Allied Properties REIT
  10. TSE: SMU.UN Summit Industrial REIT

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