ETF New VanEck Vectors FTSE International Property (Hedged) ETF

Discussion in 'Shares & Funds' started by Nodrog, 2nd Apr, 2019.

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  1. Nodrog

    Nodrog Well-Known Member

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  2. KayTea

    KayTea Well-Known Member

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    Appears to be very similar to State Street's DJRE - almost all of the Top 10 holdings are the identical, and very similar in % holdings. The VanEck one is 0.07% cheaper in management costs.

    Pros to the VanEck one, if you can see any? (I'm not being antagonistic - you know a lot more about this stuff than I do, so I genuinely want to know if there is something else I should be considering when comparing the two). I know that the VanEck one is paying dividends quarterly (instead of the twice-yearly payments from State Street) - could be a better option.......
     
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  3. The Falcon

    The Falcon Well-Known Member

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    Nodrog just posts for discussion, his posting is not an endorsement.

    This fund is ex AU, DJRE is not. That and minor fee difference is all I can see. DJRE still favored until this gets a lot more FUM
     
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  4. Nodrog

    Nodrog Well-Known Member

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    The other new ETF they released along with REIT was a hedged version of QUAL which doesn’t interest me.

    REIT did catch my eye as there hasn’t been a cap weighted hedged GReit ETF available till now. Vanguard disappointingly have been dragging the chain on releasing an ETF of their unlisted fund.

    Like all new product, if interested I would be reluctant to invest in it until there is enough FUM to increase the likelihood of survivorship. The absence of AReits is not so great a concern given it’s around 8% of local market. As also mentioned by TF the fee is less than DJRE and somewhat competitively so given DJRE is “unhedged”. This would equate to about 10 bps less.

    I was hoping they might have elected to use TOFA tax regime to smooth income distributions as is the case with IFRA ETF. Like Global listed infrastructure, global listed property also has high income distributions so the theory is that these asset classes are best “hedged” to protect the income stream from currency volatility. Same concept as in the case of global bonds. Trouble is hedging can mess badly with reliability and consistency of income distributions. Electing to use TOFA can eliminate much of this problem. But when skimming the prospectus I couldn’t see any election to use TOFA.

    Others will argue in the case of hedging messing with income distributions it doesn’t matter as in part it adds to the capital return so one simply sells units to realise the income. However this is generally not the mindset of those who invest in property and infrastructure for their high income distribution streams.

    Like @The Falcon the conclusion is that at this time DJRE remains the product of choice for Global listed property. As for hedged vs unhedged GReits despite the theory I’m still not quite sure:confused:. If given the choice I’d likely continue to hold DJRE but might consider the addition of a hedged equivalent. Simplicity, CGT, overall portfolio global currency exposure etc would feature in any decision!

    However for global listed infrastructure I’m very comfortable with it being fully “hedged”. IFRA for reasons given elsewhere is a very appealing ETF to me.

    Out of curiosity I’ll watch Sixpark’s asset allocation over time to see how they respond to new product. I’m quite impressed with them.
     
    Last edited: 3rd Apr, 2019
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