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Investing in Columbia Property Trust through ETFs


Nov. 20 2020, Updated 4:18 p.m. ET

Portfolio diversification through ETFs

Asset allocation is a primary factor responsible for investment returns, and ETFs are a convenient way for investors to build a portfolio that meets specific asset allocation needs. In addition, ETFs are a convenient and easy method of portfolio diversification across a number of asset classes.

Most ETFs track market indexes, mirroring the performances of entire markets. In this article, we’ll look at how sector-specific and sector-agnostic ETFs invest in Columbia Property Trust’s (CXP) stock.

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Sector-specific ETFs

Columbia Property Trust is a mid-sized stock on the NYSE, with a market capitalization of $3 billion. Consequently, Columbia Property Trust sees allocation in some REIT-specific ETFs.

For example, the iShares US Real Estate ETF (IYR) has a ~0.33% stake in the company. Another major REIT ETF, the SPDR Dow Jones Wilshire REIT ETF (RWR), has 0.5% exposure to Columbia Property Trust. The SPDR Dow Jones Wilshire Global Real Estate ETF (RWO) has 0.3% exposure to the company.

REIT ETFs have exposure to other office REIT stocks such as Alexandria Real Estate Equities (ARE), SL Green Realty (SLG), and Boston Properties (BXP).

IYR is the biggest of the lot, with $4.6 billion in assets under management and an expense ratio of 0.43%. RWR has $3.2 billion in assets under management and an expense ratio of 0.25%, while RWO has $2 billion in assets under management and an expense ratio of 0.5%.

Sector-agnostic ETFs

The holdings of a particular company in an ETF depend on the investment objective of the ETF. Consequently, sector-specific ETFs should have a higher exposure to companies in a sector than sector-agnostic ETFs. We outline the holdings of various ETFs in the above chart.

Sector-agnostic ETFs such as the First Trust Financials AlphaDEX ETF (FXO) and the iShares Morningstar Small-Cap ETF (JKJ) also have exposure to Columbia Property Trust at 0.2% and 0.6%, respectively. FXO has an asset base of $1 billion and an expense ratio of 0.64%.

Please visit Market Realist’s REIT page to learn more about this industry.


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