Vanguard REIT ETF
Disposable Income Is Still Below Historical Averages
Disposable income refers to the income available to a household or individual after paying off personal current taxes. Disposable income is still below historical averages.
The Great American Deleveraging: Fact or Myth?
The great American deleveraging has largely been limited to the financial sector (XLF) (IYF). Non-financial debt is still much higher than historical averages.
Simon Property Sends a Bear Hug Letter to Macerich
Simon Property (SPG) has proposed to buy Macerich (MAC) for $91 a share, half of which will be cash and half of which will be SPG stock at a fixed ratio.
Background on Macerich
Macerich is in the second tier of large retail REITs. It’s a player in the community or power shopping center segment, along with Kimco Realty (KIM).
ARCP shareholder Marcato questioned equity issuance
Even before accounting errors were disclosed, activist hedge fund shareholder Marcato Capital criticized American Realty for its acquisition strategy and equity issuance.
Why the Gloomy GDP Estimate Is Not Cause for Panic
There are several reasons why the gloomy GDP estimate is not cause for panic. The slowdown in GDP growth seems to be a temporary setback.
Why direct bidding was strong for the 10-year T-notes auction
The US Department of the Treasury holds a ten-year Treasury (IEF) notes auction every month. The ten-year Treasury (UST) yield is a benchmark yield for financial markets.
10-year Treasury notes auction saw weak demand
The ten-year Treasury notes auction saw a lower bid-to-cover ratio than last month. The ratio was 2.6x—compared to ~3x in December.
Major central banks are now diverging in their monetary policies
Major central banks are now diverging in their monetary policies, a dynamic we saw vividly on display last week with the Federal Reserve ending its quantitative easing (or QE) program, while Japan expanded its version of QE.
How Equity Residential Improved Its Balance Sheet in 2Q17
During 2Q17, Equity Residential (EQR) reported higher-than-expected top-line and bottom-line results backed by robust rent growth and occupancy levels.
GGP and Other Retail REITs Struggle to Exist in Digital Era
During 1Q17, General Growth Properties’ (GGP) occupancy rate (same-store leased percentage) fell to 95.9% from 96.6% in 1Q16.
Must-know: Credit risk retention in securitization transactions
In its most basic form, securitization pools similar forms of debt—like credit cards, car loans, or real estate mortgages (IYR) (VNQ)—into special purpose vehicles (or SPVs). The cash flow from the debt in the SPV is divided into tranches. The tranches have different risk and return characteristics.
ARCP’s Cole Capital acquisition ended due to accounting issue
In November, RCS Capital terminated a $700 million deal to acquire Cole Capital from ARCP.
How Does GGP Manage Its Balance Sheet?
GGP reached a debt-to-equity ratio 2.2x in 2014, its highest in the last five years.
Understanding Equity Residential’s Business Segments
In 1Q17, Southern California comprised 25% of Equity Residential’s (EQR) total revenues, 19% of its total revenues came from Washington, D.C., and New York comprised 21% of its total revenues.
Why rising asset prices are driving consumer confidence higher
The CCI is one of the oldest consumer surveys, originally started as a mail-in survey in 1967. It asks respondents whether certain conditions are positive, negative, or neutral.
Looking for Dividends? Stay Away from the Utilities and REITs
What makes the utilities unattractive is the fact that interest rates will likely be rising soon. The utilities require a huge amount of infrastructure.
REITs 101: Understanding this Investment Vehicle
In this series, we’ll get down to the brass tacks of investing in the REIT sector, the market’s current landscape, and the benefits you can expect from this type of investment.
Healthcare Trust of America’s Balance Sheet
In 2017, Healthcare Trust of America (HTA) had total leverage of 29.9%.
Could the Plum Creek Timber-Weyerhaeuser Merger Get Competitive?
In the Plum Creek Timber-Weyerhaeuser merger, Weyerhaeuser is paying about 7.4x trailing-12-month revenues and 25.4x trailing-12-month EBITDA.
The Real Estate Reaction: Gauging the Impact of the Fed’s Rate Hikes
The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.
How Have REITs Evolved over the Years?
After a slow start, the REIT industry expanded rapidly especially during the period from 1965 to 1975. Initially, mortgage REITs dominated the industry.
Defensive Stocks And REITs Look Overpriced
REITs are providing an average dividend yield of 3.5%, so investors are drawn to them. This is causing rich valuations and making REITs look overpriced.
Your Best Bets For A Good Inflation Hedge Right Now
Although inflation is low, it’s a good idea to have a small amount of inflation hedge in your portfolio. A small inflation hedge adds diversification.
A head-to-head comparison: What are ETFs and ETNs?
ETFs and ETNs are very similar—both trade on an exchange like a stock, follow an underlying product, and are easily accessible to investors.
Will the drop in retail sales affect General Growth Properties?
Over the past couple of months, we’ve seen a drop in retail sales. Part of this is due to falling gasoline prices, but even stripping that out, sales have been lackluster.
Why initial Jobless claims ticked up on a shortened holiday week
Initial jobless claims are one of the few labor market indicators released every week. They increased to 348,000 for the week ended January 24.
Why Dividend Stocks Have Underperformed This Year
Dividend stocks have underperformed this year so far. The dividend yield measures dividends payed by a company in the last 12 months relative to its share price.
The must-know outlook for equities and bonds in 2014
The Fed, in its latest announcement, has further reduced its bond buying program to $55 billion a month, signalling that the improvement in the economy is on track.
Simon Property Group’s Key Business Segments
Simon Property is the only REIT in the S&P 100 Index and has heavy asset concentration on the US east coast and in the central US.
How Zoning Regulations Impact City Development
Zoning is the way that governments supervise land development and the kinds of uses each individual property may be directed toward for the public interest.
Municipal Bonds Help You Care For Communities
Municipal bond issuers are state-wide and local. They typically use the funds they accumulate through issuing bonds for infrastructure projects.
Why you should invest in some of the 1,500 ETFs in the US
In this series, we’ll introduce you to the concept of exchange-traded funds (or ETFs). You’ll find out about the types of ETFs and how they can help your portfolio.
The Benefits of Real Asset Investing
In essence one of the things we have accomplished with these three products is to reduce the volatility inherent in all markets, and in particular very volatile markets like the real asset sectors.
Will Crude Oil Futures and S&P 500 Move in the Same Direction?
February US crude oil (UWT) (USL) futures contracts rose 0.5% to $61.73 per barrel on January 8. Prices are near the highest level since December 2014.
Overview of ARCP’s private capital management business
ARCP owns aggregate equity investments of $3.9 million in publicly registered, non-traded REITs.
Turmoil in China’s Stock Exchange Wreaks Havoc on REITs
China’s stock exchange wreaked havoc on the global economy for the week ended January 8, 2016. The REITs market saw a severe downturn during the week.
Why initial jobless claims keep falling, down to 315,000
Initial jobless claims are one of the few labor market indicators released every week. Unemployment is a profound driver of economic growth.
Simon Property Group’s background: A must-know for investors
Simon Property Group owns, develops, and manages real estate properties that consist of malls, premium outlets, mills, and community or lifestyle centers.
What’s behind CapitaLand’s Economic Moat
CapitaLand Commercial Trust (CCT SP) is a Singapore based real estate investment trust (REIT) that owns 10 office properties in the city’s central business district (CBD).
Simon Property Group faces competition from online retailers
Simon Property Group is by far the biggest shopping center REIT in the U.S., with a market capitalization of $53 billion. The next biggest REITs are less than half Simon’s size.
Background on Simon Property Group
Simon Property Group also has a large international presence. It owns premium outlets in Japan, South Korea, Malaysia, and Mexico.
REITs 101: Understanding this Vehicle
By Michael Orzano, Director, Global Equity Indices Publicly traded property stocks, including real estate investment trusts (or REITs) and real estate operating companies (or REOCs), allow investors to gain exposure to real estate, which is generally an illiquid asset class, without sacrificing the liquidity benefits of listed equities. They also typically offer higher yields than […]
Why Did Bonds Rally on the FOMC Statement?
On April 27, the Fed ended its FOMC meeting with a statement. It had language that was similar to its statement in March. Most of the changes were cosmetic.
Residential Sector: What Investors Should Know
The residential REIT sector mainly includes apartments and manufactured housing. It’s one of the largest segments in the REIT industry.
Shopping Center REITs Are Sensitive to Economic Cycles
Shopping center REITs mainly own and operate shopping centers that are smaller than retail malls. They’re mainly driven by higher consumer spending.
The Fed ends its asset purchase program at the October FOMC meeting
In December 2008, when the U.S. economy entered its dreadful recessionary phase, the Federal Reserve (or Fed) reduced the federal funds rate to nearly zero in order to stimulate household and business spending and support economic recovery.
Must-know: Does e-commerce mean the end of malls?
General Growth CEO Sandeep Mathrani spent a lot of time on the conference call discussing the impact of e-commerce on his company (and mall REITs in general).
Parsing the Plum Creek Timber–Weyerhaeuser Merger: Part 2
In the MAE (material adverse effect) clause of the Plum Creek Timber–Weyerhaeuser merger, there’s a disproportionate effect clause, so if something affects PCL specifically, it is considered a MAE.
What’s the Downside in the Post Properties and Mid-America Deal?
Post Properties was trading at ~$62 per share before the deal with Mid-America was announced. If the deal breaks, it could return to those levels.
Impending Rate Hike Rattling Markets
The impending rate hike will likely affect fixed-income instruments as well as equities. Markets are expected to become more volatile going ahead.
Innovation and Foreign Investment Drive Welltower’s Growth
Welltower (HCN) has successfully set itself on a growth trajectory backed by strategic initiatives, aiding its steady top line growth.
Why the Recent REIT Rebound Could Stretch a Little Further
The real estate sector (VNQ) has been lagging in performance in 2018. It’s seen a year-to-date loss of 6%.
How Is Equity Residential Rewarding Its Investors?
EQR announced a quarterly dividend of $0.50. The current dividend yield stands at 3.2%, and it has a payout ratio of 135.2% for 3Q17.
Low Initial Jobless Claims Signals Labor Market Turnaround
Initial jobless claims Initial jobless claims are one of the few labor market indicators released every week. Unemployment is a profound economic growth driver. Persistent unemployment has been the Achilles’ heel of this recovery. While it seems like the big layoffs are largely finished, firms are still reluctant to aggressively add staff. Initial jobless claims have been […]
How Rising Interest Rates Could Affect Equity Residential
The Fed indicated that it could implement two more rate hikes in 2017. The market speculates one of the rate hikes could occur in June, and the other one is expected to occur around December 2017.
Why Equity Residential’s Top Line Soared in 2Q17
Equity Residential’s (EQR) top line in 2Q17 surpassed both the year-ago results as well as management’s expectations backed by rent growth.
A recovering economy: Does the manufacturing sector promise growth?
With the Federal Reserve stepping in to provide liquidity in the market through its quantitative easing, the consumer confidence in markets and the U.S. economy are slowly getting back on track.
Why real interest rates could stay low
The Federal Reserve (or Fed) introduced the bond buying program (TLT). The program—popularly known as quantitative easing (or QE)—put downward pressure on yields across the fixed income spectrum.
Why Elliott Management Might Be in Trouble
Last week, Elliott Management filed its 13F for the first quarter of 2020. In the last quarter, the hedge fund’s AUM was worth around $73.15 billion.
Does Falling Gas Mean A Merry Christmas For Retailers?
At the end of the day, consumers don’t start spending after recessions because they want to. They do it because they have to.
The FOMC looks at normalizing the size of its balance sheet
Three rounds of quantitative easing have increased the Fed’s balance sheet to an unprecedented $4.5 trillion on October 22, 2014. Now, the Fed is looking at normalize its balance sheet size.
How close is the FOMC to achieving its dual mandate?
We’ve talked about the dual mandate and factors constraining the Federal Reserve from achieving this mandate. Let’s now assess how close the Fed has come to achieving its macroeconomic objectives.
Recommendation: Go beyond traditional stocks and bonds
Finally, it’s worth considering incorporating non-traditional, or alternative, strategies into your investing arsenal. With such investments, you can potentially enhance diversification and amplify your portfolio’s growth potential.
The implications of higher yields at the 10-year Treasury auction
The ten-year Treasury (IEF) note auction is of great interest to stock and bond (BND) market participants. Ten-year Treasury yields are benchmarks for many interest rates, including mortgages (IYR)(VNQ) and equity risk premiums (QQQ).
Why income stocks may be risky
There has been a shift to real estate (VNQ), utilities (XLU), and consumer staple (XLP) stocks in 2014 because investors are looking for equities with bond like characteristics that give them a higher income.
Must-know: Implications of inflation and the necessity of TIPS
In order to eliminate inflation risk for investors, the U.S. Treasury introduced TIPS in 1997—TIPS protect the value of debt securities from eroding due to inflation.
Why mortgage applications plummeted when interest rates increased
Mortgage applications fell 3.5% for the week ending March 21 because mortgage rates spiked.
The Bullish And Bearish Abandoned Baby Candlestick Pattern
The Bullish Abandoned Baby candlestick pattern is a reversal pattern. The pattern has three candles. It forms at the bottom of a trend. In this pattern, the first candle is any long and bearish candle.
The “Great Deleveraging” that never happened: The US debt problem
For several years, media headlines have been filled with references to a mythical “deleveraging,” or a reduction in the level of U.S. debt. In reality, U.S. non-financial debt has increased.
James Bullard assesses how close the FOMC is to its goals
The president and CEO of the Federal Reserve Bank of St. Louis, James Bullard, spoke on the economy and monetary policy while addressing the Tennessee Bankers Association’s annual meeting in Palm Beach, Florida, on June 9, 2014.
Why Minneapolis Fed President Kocherlakota disagrees with the FOMC
Narayana Kocherlakota is an American economist and the 12th and current president of the Federal Reserve Bank of Minneapolis.
Crude Oil Futures Continued to Rally, Wall Street Fell
February WTI crude oil futures contracts also rose 1% to $63.57 per barrel on January 10, 2018. It’s the highest settlement since December 2014.
Crude Oil Futures and Wall Street Extends the Rally
US crude oil futures contracts for February delivery also rose 0.6% to $62.01 per barrel on January 4, 2018—the highest settlement since December 2014.
Will the Fed’s Dovish Stance Ignite REITs This Year?
With the strength of the labor market faltering, market participants expect the Federal Reserve to take a dovish stance on interest rates. What does this mean for REITs?
How Real Asset Investing Could Boost Portfolio Returns
Volatility in stocks and bonds shifts investors’ attention from a traditional stock-bond portfolio to another asset class called real assets.
Equinix Continues to Enhance Shareholders’ Wealth
On August 8, Equinix (EQIX) declared a regular quarterly cash dividend of $2.28 per share for the third quarter.
Extra Space Rides on Strong Fundamentals and Earnings Outlook
Extra Space’s top-line and bottom-line results have been seeing YoY (year-over-year) growth for the past several quarters.
Are Real Assets in the Goldilocks Zone?
According to the IMF (International Monetary Fund), the world economy grew 3.8% in 2017, the fastest since 2011.
Equinix to Continue Rewarding Shareholders with Dividend Payments
In 2015, 2016 and 2017, Equinix paid regular cash dividend per share of $6.76, $7.00 and $8.00, respectively.
Where Equity Residential’s Expenses Are Heading
Equity Residential’s (EQR) second-quarter operating expenses increased at a higher rate than the growth rate of same-store revenues.
RAAX ETF: Capturing Real Benefits of Real Assets
RAAX’s allocation process provides exposure to segments with better returns profiles while managing overall portfolio risk.
RAAX Fund Uses Rules-based Approach for Optimum Allocation
VanEck The VanEck Vectors Real Asset Allocation ETF (RAAX) uses a data-driven, rules-based process that leverages over 50 indicators (technical, macroeconomic and fundamental, commodity price, and sentiment) to allocate across 12 individual real asset segments in five broad real asset sectors. These objective indicators identify the segments with positive expected returns. Then, using correlation and […]
Will the Rollback of Dodd-Frank Help the Real Estate Sector?
In a continued effort to deregulate the economy, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act.
Why REIT Valuations Look Attractive as the Market Hits the Roof
In the recently concluded first quarter, more than 95% of REITs reported earnings beats and maintained their guidances for 2018.
How Forex Volatility Could Affect American Tower’s Operations
While the US dollar was expected to gain from the growing economy and the rising interest rates, the recent tax cuts have flipped the scenario.
A Look into American Tower’s Major Revenue Drivers
American Tower (AMT) owns and operates over 160,000 communications sites around the world.
RAAX ETF Aims to Generate Long-term Total Returns
Now that we understand why the macro environment is supportive, why don’t you tell us a little bit about the investment process?
RAAX: Key Focus Areas for Long-Term Considerations
Now that we understand the investment process overall, can you give us a few example sectors and how they work?
Strategic Allocation to Real Assets Could Boost Portfolio Returns
Building on a legacy in the real asset space, VanEck is soon to debut a new fund, ticker RAAX.
Non-Manufacturing Sector Grew for 98th Consecutive Month
In March, the service sector continued to grow but at a slower pace.
How Analysts View HCP Inc. in Fiscal 2018
Analysts gave HCP a mean price target of $26.59, implying a significant ~17.0% rise from its current level of $22.68.
HCP’s Performance in Comparison to Its Peers
HCP has a $2.0 billion credit facility with maturity in 2021, and the majority of its debt matures after 2019.
HCP and Its Falling Shareholder Returns
HCP has indicated that the recently enacted Tax Cut and Jobs Act could materially and adversely affect the company and its stockholders.
HCP’s Portfolio Riding on Developments, Acquisitions, and More
In 4Q17, HCP recorded an $84.0 million impairment on the debt investment and reduced the value to $105.0 million.
HCP Inc.’s Demographic Drivers of Demand
According to the National Bureau of Economic Data, the first wave of Baby Boomers are expected to turn 75 in 2020.
HCP Inc.’s Expanding Medical Office Portfolio
Rental revenues for HCP increased ~3.0% from $392.0 million in 2016 to $400.0 million in 2017.
Chart in Focus: HCP’s Life Science Portfolio
Life Science is an 8.0 million square foot portfolio and represents ~25.0% of HCP’s NOI.
Healthcare Trust of America Maintains Its ‘Buy’ Rating in 2018
Analysts gave HTA a mean price target of $33.38, implying a significant ~26.0% rise from its current level of $26.30.
HCP Beats Funds from Operations, Misses on Revenues in 4Q17
For 2017, HCP’s funds from operation stood at $1.95 per share, and its same-store cash NOI growth was 3.4%.