
TSE:XRE
This summary was created by AI, based on 2 opinions in the last 12 months.
The iShares S&P/TSX Capped REIT Index ETF (XRE-T) faces challenges in the current Canadian real estate market. Experts caution about uncertainties related to the economy, immigration, and overall market stability, suggesting a degree of risk for investors. While the ETF offers a decent yield of 4.87%, there are concerns about potential capital appreciation and growth prospects, particularly in a volatile environment. Some reviews recommend looking into U.S. real estate sectors such as logistics and data centers for better growth opportunities. Alternatives like bank stocks or covered call ETFs are also suggested for those seeking real estate exposure without the associated risks of Canadian REITs.
He is a bit of a contrarian when it comes to REIT valuations. You have to be careful when you are overpaying for yield and the REIT sector kind of lends itself to that category. Has had a very good run. Most of the REITs are great operating businesses. But on a free cash flow basis, they are trading at a 14-16 times AFFO and he prefers 10-12 times. This is a good hedge against your long positions.
REITs. Felt we were due for a little bit of a downturn in them. They are still great buys but you have to be selective with them. He still likes them. XRE-T is a recommendation.