ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Alternatives Channel
  2. Real Estate Fundamentals Remain Sturdy
Alternatives Channel
Share

Real Estate Fundamentals Remain Sturdy

Tom LydonOct 03, 2022
2022-10-03

Rising interest rates are pinching publicly traded real estate investment trusts (REITs) this year, but there’s evidence confirming that the real estate sector’s overall fundamentals remain stout.

That favorable fundamental outlook could open the door to opportunity with assets such as the Virtus Duff & Phelps Global Real Estate Securities VGISX. The actively managed VGISX carries Morningstar five-star ratings for the trailing five- and 10-year periods and focuses on global real estate securities, potentially making it an ideal avenue for investors looking for value in a sector that’s arguably been punished too harshly this year.

While VGISX has the flexibility to take a global approach, the bulk of the investable, listed real estate universe is comprised of U.S.-based companies, and that’s a plus at a time of dollar strength.

“Real estate is largely domestic and should be more insulated from increased cost pressure from reshoring. There are also pockets of real estate, such as industrial real estate investment trusts, that are likely going to benefit from reshoring, with increased demand for domestic warehouses and industrial activity,” wrote Bank of America strategists Savita Subramanian and Jill Carey Hall in a report out last month.

Making VGISX all the more appealing is earnings quality. At a time when investors are increasingly concerned about S&P 500 earnings growth, particularly in growth-heavy sectors, real estate could be a refuge of earnings steadiness.

“Consensus 2022 earnings per share has risen 10% year-to-date and real estate, energy, and utilities are the only sectors with more upward revisions to earnings estimates than downward revisions over the past three months," noted the BofA strategists. “Moreover, 77% of real estate companies posted positive real sales growth (versus CPI) in the second quarter, much better than just 54% for the S&P 500.”

Among Bank of America’s preferred real estate sub-sectors are industrial, residential, and retail. That’s a positive for VGISX investors because, as of the end of the second quarter, the fund allocated over 54% of its weight to those three groups.

“Quality is a key attribute to stock outperformance late cycle. We believe higher quality REITs will offer the best earnings and distribution growth in 2022 and 2023,” added the Bank of America strategists.

At the end of the second quarter, the average market capitalization of VGISX components was $19.64 billion, according to issuer data.

For more news, information, and strategy, visit the Alternatives Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X