XLRE Opens the Real Estate Door for Investors
Denver, CO
|
June 12, 2023 03:15 PM Eastern Daylight Time
A decision was made in 2015 by S&P and MSCI to split the GICS (Global Industry Classification Standard) financial sector into two new sectors: financials and real estate. The creation of a new sector, of course, spurred new real estate exchange-traded funds such as the Real Estate Select Sector SPDR (XLRE).
Due to this update, the sibling fund, Financials Select Sector SPDR Fund XLF, spun off its real estate exposure to this fund, so the overlap in holdings is greatly reduced. XLRE represents the new real estate sector, although mortgage REITs remain in the financial sector.
Like the rest of the Sector SPDR ETF suite, XLRE holds a concentrated portfolio of mostly large caps. The index is rebalanced quarterly to meet asset diversification requirements.
XLRE tracks a market-cap-weighted index of REITs and real estate stocks, excluding mortgage REITs, from the S&P 500. The ETF has $4.3 billion in assets under management and an investor-friendly expense ratio of 0.10%*.
Looking Under XLRE’s Hood**
The fund has 30 holdings.
Prologis is the top holding at 13.60%. This real estate investment trust is the largest industrial real estate company in the world, operating in 19 countries across North America. The industrial holdings of Prologis are dominant properties in their respective markets.
Coming in second in terms of holdings is American Tower, at 10.16%. This REIT is an owner and operator of wireless and broadcast communications infrastructure in several countries worldwide.
Also included in the top five holdings is Equinix (8.16%), which is an American multinational company that specializes in Internet connection and data centers.
The fourth-largest holding is Crown Castle (5.80%), which is a real estate investment trust and provider of shared communications infrastructure in the United States. The company’s network includes cellphone towers, fiber supporting small cells, and fiber solutions. It has 100 offices nationwide.
Public Storage is the fifth-largest holding at 5.30% and it is also run as a REIT. It is the largest brand of self-storage services in the U.S. There are more than 2,200 Public Storage self-storage locations in the U.S., Canada, and Europe. It also owns 42% of an office parks subsidiary, sells packing supplies, and provides other services.
Easy, Cheap, and Diverse Access
Together, XLRE’s top holdings represent more than 40% of the fund, using a mix of different real estate classes.
XLRE offers investors a diverse real estate portfolio covering the leading REITs in the U.S. REITs attempt to deliver attractive total returns to investors by combining dividend yield and the potential for capital gains.
Having this ability to easily tap into these different real estate asset classes at a reasonable cost is what the XLRE exchange-traded fund offers advisors and investors.
DISCLAIMER: This is a work of research and should not be taken as investment or financial advice. Therefore, Select Sector SPDRs or the publisher is not liable for any decision made based on the publication.
About the Company:
Select Sector SPDR ETFs offer flexibility and customization opportunities. Many investors have similar outlooks, but no two are exactly alike. Select Sector SPDR ETFs let investors select the sectors that best meet their investment goals.
*Ordinary brokerage fees apply
**Holdings, Weightings & Assets as of 5/31/23 subject to change
DISCLOSURES
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Index figures do not reflect any fees, expenses or taxes. An investor should consider investment objectives, risks, fees and expenses before investing.
One may not invest directly in an index.
Transparent ETFs provide daily disclosure of portfolio holdings and weightings
All ETFs are subject to risk, including loss of principal. Sector ETF products are also subject to sector risk and non-diversification risk, which generally will result in greater price fluctuations than the overall market. Diversification does not eliminate risk.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust.
Media Contact:
Company: Select Sector SPDRs
Contact: Dan Dolan*
Address: 1290 Broadway, Suite 1000, Denver, CO 80203
Country: United States
Email: dan.dolan@sectorspdrs.com
Website: https://www.sectorspdrs.com/
*Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
SEL006640 EXP 8/31/23
Contact Details
Dan Dolan
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