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Larry Berman CFA, CMT, CTAiShares S&P/TSX Capped REIT Index ETFXRE.TODON'T BUYSep 14, 2026

It's corrected during rising rates, following a good rally after the April lows. He doesn't expect a long interest rate cycle, and hope the Fed won't raise rates this week. But doesn't like XRE which is heavily weighted in a few stocks, preferring an equal-weight ETF like ZRE.

Larry Berman CFA, CMT, CTA

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$15.73

Stock price when the opinion was issued

$15.73

As of Sep 14, 2026. Market Open.

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DON'T BUY

Be cautious about Canadian real estate market -- uncertainties about economy, real estate, and immigration. Decent yield of 4.87%, but your capital is at risk.

If you want a REIT, look instead to the US for logistics, data centres, storage, and warehouses.

SELL ON STRENGTH

Happy with 5+% yield, but looking for more capital appreciation.

REITs are difficult. If you have a very low cost base and have to pay tax on selling, figure out how you want to work yourself out of it over a couple of years. Growth will be challenging.

For alternatives with real estate exposure, you might want to look at some of the banks or a bank covered call ETF. Take a look at ZEB.

SELL

Challenging to own REITs in Canada. The 5-year return is slightly negative, even including dividends. Some names in it make sense, some don't. Cumulative inflation has hurt REI.UN, the second-largest holding. Softness in Canadian economy.

5- and 10-year yields are moving higher, and REITs are very sensitive to higher rates because of their debt. REITs might make sense in a stronger economy, with rates moving down.

DON'T BUY

XRE vs. IYR Totally different products because of the country, given XRE is Canada and IYR is the US. XRE top 31% investments are in retail. IYR has only 9% retail. For residential, it's 25% XRE and only 15% IYR. Largest holding in IYR is AMT. IYR is more diversified, less exposed to retail which is a good thing. Safer place to be at this time is IYR. REITs usually do well from March to October, but this might start earlier this earlier, especially if markets turn down. Wait until February/March.

SELL

He'd move on. There's a 48% spread between the top and bottom quartile performers. Can't capture the upside with an ETF. Better to focus on the winners, and avoid the losers. CAR, HOM-U, WIR-U, and Granite are great choices. Look for growth, and at a discount is even better.

DON'T BUY

Holds some office, some apartments. Some of those areas will be challenged. Try well-positioned retail REITs, ones where vacancies are low, or logistic warehouse-type REITs.

DON'T BUY

An ETF like XRE combines the good, the bad, and the ugly with different sectors and growth profiles. Look for companies that generate strong, recurring cashflow and grow distributions. Industrials have significant tailwinds for the next few years. Also apartments, which are trading at a discount to NAV, as people still need somewhere to live.

COMMENT

And REITs outside Canada? Always a good choice if you want broad exposure to Canadian real estate. CAP REIT is the biggest holding, which he really likes, as well as H&R and Riocan REIT (also likes it). However, XRE is concentrated in these names, so you may be better off picking specific names that offer better growth. To answer: Outside Canada, you can look at VNQ and IRR in the U.S. that covers the U.S. REIT market. The US REIT market has more specialized sectors, like towers and data centres.

WAIT

Had a good run in 2019, but now is breaking trend. He expects higher interest rates in 2021, which will pressure REITs. XRE will head lower in early-2020. He predicts a general market pullback in January.

BUY

A diversified REIT index. It charges the REIT index and charges a low MER. Real estate has performed very well this year as interest rates have dropped. The AFFO for REITs is high, true, but urbanization and concentration is happening. The only sector in REITs that's lagging is retail. Otherwise, you should be in REITs.

BUY

Outlook of REITs in Canada for 6-12 months. REIT markets in Canada boil down to Vancouver, Toronto and the rest of Canada. As an asset class, REITs are a good diversifier as an asset class and are weakly (but not negatively) correlated to the Canadian market. REITs pay a decent risk-adjusted return. He likes XRE.

WAIT

The run up from $24 was impressive for D.UN-T. He does not own individual real estate -- he holds XRE-T instead. He would like to see it consolidate at these levels for a while before buying.

DON'T BUY

You have to be careful when you're buying a market weighted ETF. You get exposure to 4 or 5 of the big ones, and not the rest. So she prefers to do individual stock picking.

COMMENT

Canadian REITs. REITs in general are good in the portfolio but he would not go 'gaga' on them. Canada has had inappropriately low monetary policy. In general Canadian real estate is very expensive. It is an okay building block because of the income potential. XRE-T groups the Canadian REITs. But there are better opportunities around the world.

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