What’s the longest-standing investment in the world? Arguably real estate. Since the Middle Ages, real estate has successfully provided investors with a regular income and often protected their wealth. And yet, it is not just about the money. When you invest in real estate, you also invest in people's homes, workplaces, and world-class infrastructure. The Real Estate ETF by VanEck provides you with this opportunity.
Risks of a Real Estate ETF: You may lose money up to the total loss of your investment due to Equity Market Risk and Industry Concentration Risk as described in the Main Risk Factors, KID and prospectus.
Today, real estate has become the foundation of many investment portfolios. The global population continues to grow and the economy is demanding new workplaces, both acting as drivers for the real estate sector. Take the past 20 years: investors holding real estate equities have received higher returns than the broader stock market (see chart below), while spreading their portfolio risks.
Listed real estate has delivered higher returns than the global equity market
Past performance is not a reliable indicator of future performance. Source: VanEck. Global equities are represented by the MSCI World Gross Return Index. Listed Real Estate by the GPR 250 Gross Return Index. Data starting at 1 January 2000.
Real estate investments are a way to diversify a portfolio by providing exposure to an asset class different from stocks and bonds. Real estate has a low correlation with other traditional assets, meaning that its performance does not move in tandem with other assets. This can help to reduce overall portfolio volatility and increase stability, as well as potentially provide a source of stable income through rent. Professional investors also actively use real estate investments for this purpose. Additionally, real estate has the potential for long-term appreciation, which can help drive portfolio growth. It's important to keep in mind that, like any investment, real estate comes with its own set of risks and requires careful consideration before making an investment.
Example: Norwegian Pension Fund holdings (2022)
The growing population can be one of the leading factors impacting the real estate market. In 1950, the global population was approaching 2.5bn people. By 2023 it has more than tripled and reached 8bn people just 12 years after crossing the 7bn milestone. The UN estimates that this rapid growth is not going to stop any time soon and we will have 10bn people on our planet by 2060. Population growth will drive the demand for new offices, infrastructure, shopping malls and hotels.
Even the real estate sector is challenged by work from home, the online shopping boom, and the technological advantages of our society. Still, real estate companies have proven to be more resilient than one might think. Companies are actively changing their holdings to answer current demands, for example, by converting excessive office or retail space into modern housing. Real estate may be seen by politicians and the government as the cornerstone of our society, therefore, it is not uncommon to see a push for the redesign of existing premises instead of leaving them empty.
Not everyone can afford to buy buildings and benefit from their attractive returns. However, buying listed real estate through the VanEck Global Real Estate ETF brings listed real estate closer to all investors. It transforms real estate investing in the following ways:
When building our ETFs, we’re committed to quality and reducing risks. In summary, the Fund offers the following advantages:
The VanEck Global Real Estate UCITS ETF is diversified across 100 real estate companies from six real estate sectors.
Residentials include apartment buildings, flats, houses, student housing, manufactured homes, and single-family homes.
Vonovia, one of the holdings of the Real Estate ETF2, is one of the leading housing providers on the German market with a focus on social perspective. The company offers services and housing to roughly one million residents. Vonovia constructs new buildings and strives to shape neighborhoods to enhance the quality of life.
Source: VONOVIA SE
2Part of the portfolio as of 31/03/2023
This includes office buildings, skyscrapers, and office parks in central business districts or suburban areas.
Boston Properties3 is one of the largest publicly traded REITs in the United States that invests in premier workspaces. The core of its portfolio consists of properties in Boston, Los Angeles, New York City and other key cities in the US.
The Prudential Center in Boston, US.
Source: Boston Properties
3Part of the portfolio as of 31/03/2023
Industrials include factories, industrial facilities, warehouses, and distribution centers.
Prologis4 is a Real Estate Investment Trust that provides solutions in logistics. It invests in the largest distribution centers and warehouses located close to massive urban areas with strong demand and where land is scarce. With its portfolio spread across the globe, Prologis is one of the largest real estate companies in the world.
Prologis Park Ichikawa 2 in Japan
Source: Prologis
4Part of the portfolio as of 31/03/2023
Includes hotels, resorts, and other leisure properties.
In addition to owning Caesars Palace Las Vegas, MGM Grand, and Venetian Resort Las V
