This article was originally published on ETFTrends.com.
Vident Financial added to its existing suite of funds on Tuesday with the launch of a REIT ETF: the U.S. Diversified Real Estate ETF (NYSE Arca: PPTY).
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Real estate has played a pivotal role in the last nine years of economic expansion with many investors looking to capitalize on the segment.
However, investing in real estate requires specific knowledge about a particular location.
“If you ask for the three most important factors when investing in real estate, you’ll probably hear ‘location, location, location.’ To this we’d add property type and leverage,” said Fred Stoops, head of real estate investments at Vident.
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Real estate investment ETFs pool together exposure to a large number of different properties for diversification purposes.
“The factors that matter when investing in real estate are no secret,” Stoops continued. “Yet they’re ignored by the traditional cap-weighted approach, which today has over 95% of REIT ETF assets. With the launch of PPTY, we’re looking to give investors access to a better solution: a rules-based fund that delivers diversified exposure to U.S. real estate.”
PPTY, which has a management fee of 0.53%, seeks to track, before fees and expenses, the performance of the U.S. Diversified Real Estate Index (PPTYX).
The portfolio construction process uses data on the individual properties held by each company in the investment universe to build a portfolio diversified by location and property type. Leverage and governance factors are further included to reduce exposure to higher risk companies.
PPTY joins a lineup of Vident Financial ETFs that also includes the Vident International Equity Fund (VIDI), Vident Core U.S. Equity Fund (VUSE), Vident Core U.S. Bond Strategy (VBND), and FLAG-Forensic Accounting Long-Short ETF (FLAG).
For more information on new fund products, visit our new ETFs category.
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