ETF Views on DJRE

Any one buying DJRE? Whats your views on this? Looks good to me for global REIT exposure and good dividend yield.

 

There's plenty of cons (reits are tax inefficient - I'd rather no dividend hence less tax paid now, the fee is relatively high, REITs are considered a proxy for small cap value and "junky"credit, etc.). But I bought 3 months ago.

I split 50/50 DJRE and REIT, which is essentially the same but currency hedged. It won't make up a huge % of my portfolio, but the two will combine for 10% overall. If you can put them in a low tax environment that's preferred.

 

DJRE (REITS) have low correlation with large cap equities found in ASX and S&P500 for example. For that diversification it can be considered worth holding.

DJRE is the REIT I use in my portfolio, but that doesn't mean it is the right one for you.

Relative to other indexes it hasn't recovered as well post-COVID. Mean reversion theory implies it has more potential at the moment.

Future reality is unknown.

 

Be nice if it gets back to previous highs



Assets Under Management as of 01 Dec 2020 AUD $336.62 M

 

Does it? From just a casual observation I perceived a high correlation which is what put me off looking into DJRE (and IFRA) too much.

Are you talking theory or what you have observed? As I said I haven’t been looking hard so I’m probably wrong, so interested in your observations.

 

The correlation is typically moderate, but like most equity assets approaches 1 during major crashes. But not every time, it boomed during the tech wreck while USA markets collapsed. The last two major crashes have been either caused by real estate (GFC) or directly impact it (office buildings anyone?) so the synchronized drop makes sense. Look at asset quilts, understand that REITs are very high volatility, and make your own decision. I like them as a modest part of my portfolio for SANF in case of a tech wreck repeat and the hope of a diversification free lunch.