Want to invest ethically for a brighter future?
(but still make lots of money)?

Want to invest ethically for a brighter future? (but still make lots of money)?

 Take Rask’s FREE Ethical Investing course today.

  • Online & 100% free
  • ETFs, shares & Super
Want to invest ethically for a brighter future? 
(but still make lots of money)?

 Take Rask’s FREE online Ethical Investing course.

Is The AMP Global Property ETF (RENT) A Good Option For Income?

With interest rates so low and only expected to decline further, is the AMP Capital Global Property Securities Fund (ASX: RENT) a good ETF for income?

Why Invest In Property ETFs?

Exchange-traded funds are investment funds that are listed on a stock exchange and provide exposure to a range of shares or assets (such as property) with a single purchase.

Property ETFs more specifically have a few appealing features.

Firstly, property investing can have very high capital requirements and is simply unaffordable for many investors. Property ETFs allow investors to gain exposure to real estate without a large deposit and an even larger home loan.

Secondly, real estate provides some protection against inflation since property prices and rent are partly driven by inflation.

Thirdly, property ETFs or real estate investment trusts (REITs) often pay large dividends from the rental income received, so they can be attractive income investments.

The video below is a snippet of an episode of The Australian Investors Podcast where Chris Bates discusses the worst property investing mistakes Australians can make:

About The AMP Capital RENT ETF

The AMP Capital Global Property Securities Fund is a partnership between BetaShares and AMP Limited (ASX: AMP).

This ETF aims to combine AMP Capital’s active management expertise and BetaShares’ ETF expertise to provide exposure to an actively managed portfolio of property companies and REITs from around the world.

Most of the RENT ETF (more than 55%) is invested in North America, with around 20% in Asia and 15% in Europe. Less than 10% of the fund is invested in the Australasia region.

In terms of sectors, around 30% is invested in industrial and office REITs and roughly 18% in real estate holdings and developments. The remainder of the ETF is spread across retail, speciality, residential, hotel and lodging, and diversified REITs, as well as a small cash holding.

The ETF attempts to outperform the FTSE EPRA/NAREIT Developed Index AUD Net TRI index. Over the last three years, the ETF has returned 8.85% per year after fees, outperforming the benchmark return of 8.32% per year. The last 12 months has been particularly strong with the ETF returning 17.74%.

The RENT ETF pays quarterly dividends. At the time of the July dividend, the annual distribution return was 2.04%.

Fees & Risks

As an actively managed fund, the RENT ETF charges a relatively high management fee of 0.9916% per year.

The ETF is unhedged, meaning it is exposed to movements in exchange rates which could materially impact returns. The argument that property investing is a hedge against inflation is also becoming less attractive as inflation declines.

This should be classed as a tactical ETF rather than as a core part of your portfolio because there is little diversification benefit if you’re only investing in the real estate sector.

My Take

The RENT ETF has reasonably high fees, but its performance has been respectable to date and is beating its benchmark. I can see the appeal of investing in a property ETF rather than physical real estate but as far as diversification and dividend yield are concerned, I think there are better ETFs on offer.

For example, I’d rather invest in our number one ETF pick in the free report below.

Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better? Please give us us some feedback :)

We care about your experience, please let us know if you have any suggestions to improve our site.