Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • 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
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF of the Week: NetLease Corporate Real Estate ETF, NETL
News
Share

ETF of the Week: NetLease Corporate Real Estate ETF, NETL

Aaron NeuwirthApr 09, 2021
2021-04-09

ETF Trends CEO Tom Lydon discusses the NetLease Corporate Real Estate ETF (NETL) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.

NETL seeks to track the performance before fees and expenses of the Fundamental Income Net Lease Real Estate Index (NETLXT). NETL seeks to provide investors access to sustainable income with identifiable growth through investments in Net Lease REITs. Net Lease REITs are a segment of the real estate sector that focuses on leasing properties to single tenants under net leases wherein the tenants are responsible for the payment of most, if not all, operating expenses, including property taxes, insurance, and maintenance.

This is a high-yield-generating idea that focuses on the real estate sector leasing corporate properties to single tenants. NETL can help investors access a total return strategy that targets sustainable income and predictable growth.


Content continues below advertisement

Why Real Estate Investment Trusts?

Real estate investment trusts are great long-term sources of returns. Publicly listed equity REITs exhibited some of the best average annual net return over a two-decade-long period.

There are improved diversification benefits as well. The sector provided a great source of diversification in a traditional stock and bond mix. REITs showed a -0.03 correlation to U.S. long bonds and a 0.53 correlation to U.S. large caps.

As far as improved risk-adjusted returns outside of fixed income, REITs had the highest Sharpe ratio measuring of 0.44. This reflects historically high returns and just above-average volatility.

Net lease real estate refers to a contractual agreement where the individual leasing the property pays a portion or all of the taxes, insurance fees, and maintenance costs for a property, along with rent. Most commercial real estate follows a net lease model. Basically, the tenant is expected to pay for all the property costs as if the tenant were the owner.

Rent escalation provisions in leases may help income grow and keep pace with inflation. The most common net lease is a “triple-net lease,” which requires the tenant to pay property taxes, insurance, and maintenance – the three nets in a lease agreement.

These properties include convenience stores, drug stores, restaurants, grocery stores, distribution centers, corporate headquarters, health clubs, and movie theaters. These are all long-term tenant-owning properties net leased to single tenants. They require minimal management and fewer risks to consider when compared to multi-tenant REITs.

Traditional landlords of a REIT with multiple tenants will consider operating expenses, property management, rent roll, lease maturities, alternative space, and local supply/demand. A single-tenant net lease will need to consider tenant credit quality, the property’s importance to the tenant, and alternative spaces available. Consequently, minimal landlord responsibilities result in higher margins and more consistent cash flows for single-tenant net leases.

Listen to the full podcast episode on the NETL ETF:

For more podcast episodes featuring Tom Lydon, visit our podcasts category.

This article originally appeared on ETFTrends.com.

» Popular Pages

  • Tickers
  • Articles

Aug 09

2Q22 Midstream & MLP Dividends: Let the Good Times Roll

Aug 09

Economic Signals to Watch in the Second Half: Part 1

Aug 09

How the Inflation Reduction Act Affects Midstream

Aug 09

Direxion’s David Mazza on Single-Stock Leveraged ETFs

Aug 09

The Semiconductor & Cleantech Growth Potential in China

Aug 09

These 3 FlexShares ETFs Saw Largest July Flows

Aug 09

Direxion Launches Apple & Tesla Single-Stock ETFs

Aug 09

ETF Prime: Tom Lydon on the Market Rebound and More

Aug 09

New ETF Launch Looks to DRLL Into U.S. Energy Sector

Aug 09

Tesla Poised To Continue To Take EV Market Share

QQQ

Invesco QQQ Trust

VOO

Vanguard S&P 500 ETF

SPY

SPDR S&P 500 ETF Trust

JEPI

JPMorgan Equity Premium...

SCHD

Schwab US Dividend Equity ETF...

VTI

Vanguard Total Stock Market...

TQQQ

ProShares UltraPro QQQ

VNQ

Vanguard Real Estate ETF

VGT

Vanguard Information...

VYM

Vanguard High Dividend Yield...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

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