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Technology and business consultant, who invests in Canada Europe, Australia, and USA. Deep financial sector and financial services experience from both business and technology perspectives. A do-it-yourself income investor, who is always evaluating and seeking high-yield and long-term, long... More
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  • Canadian Real Estate Funds And Canadian-Traded International REITs (Part VIII-A)  0 comments
    Jan 31, 2012 8:07 PM

    Unfortunately, none of the Canadian funds are available on US stock exchanges or over the counter.

    One can buy two types of real estate funds on the Canadian stock exchanges.

    1. Canadian Real Estate Funds (CEFs, ETFs, etc.) which hold Canadian real estate securities, and are the target topic of the series of articles, and are traded on the Toronto Stock Exchange (TSX). Unfortunately, none seem to be available OTC. Therefore, if you want to buy these, your full-broker may charge you (unreasonably) high commissions.

    2. There are also international (non-Canadian assets) real estate funds traded on Canadian Exchanges. For non-Canadians, it is probably easier and more cost effective to buy this type of exposure on the US markets.

    This is a table of statistics based on the Canadian stock exchange activities. The US sources do not typically carry this data on Canadian funds and securities, and this may be important to your investment decision.

     

     

    Name / Website

    CDN Ticker

    Sector

    Payout Ratio %

    CDN Recent Price

    CDN 52-wk High

    CDN 52-wk Low

    Yield

    60-mo Beta

    P/E

    1-yr Return

    3-yr Return

    5-yr Return

    Market Cap $k

    BMO Equal Weight REITs Index ETF

    ZRE

    Fund

    N/A

    $18.42

    $18.88

    $16.01

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    Canadian REIT Income Fund

    RIU.UN

    Fund

    N/A

    $9.35

    $9.90

    $9.00

    5.90%

    n.a.

    n.a.

    n.a.

    n.a.

    n.a.

    $44,412

    Criterion REIT (formerly: Split REIT Opportunity Trust)

    SOT.UN

    Fund

    9

    $18.01

    $18.65

    $14.00

    3.00%

    1.51

    3.1

    35.56%

    104.72%

    6.91%

    $11,796

    First Asset REIT Income Fund

    RIT.UN

    Fund

    20

    $11.26

    $11.79

    $9.50

    5.30%

    0.64

    3.8

    15.34%

    37.76%

    7.30%

    $87,822

    iShares S&P/TSX Capped REIT Index

    XRE

    Fund

    N/A

    $15.39

    $15.45

    $12.85

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    Morguard Sunstone Real Estate Income Fund

    MSN.UN

    Fund

    N/A

    $9.72

    $10.70

    $8.03

    6.70%

    n.a.

    n.a.

    7.39%

    n.a.

    n.a.

    $27,751

    REIT INDEXPLUS Income Fund

    IDR.UN

    Fund

    N/A

    $10.45

    $11.96

    $9.02

    7.50%

    n.a.

    n.a.

    n.a.

    n.a.

    n.a.

    $151,110

    Claymore Global Real Estate ETF

    CGR

    International

    N/A

    $16.44

    $18.48

    $14.00

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    N/A

    Dundee International REIT

    DI.UN

    International

    N/A

    $10.00

    $10.45

    $9.05

    8.00%

    n.a.

    n.a.

    n.a.

    n.a.

    n.a.

    $438,500

    Pacrim International Capital

    PCN

    International

    0

    $0.28

    $0.60

    $0.19

    n.a.

    4.14

    50

    -58.33%

    155.44%

    4.56%

    $17,936

    Timbercreek Global Real Estate Fund

    TGF.UN

    International

    N/A

    $10.74

    $12.30

    $10.31

    7.70%

    n.a.

    n.a.

    -0.85%

    n.a.

    n.a.

    $147,347

                                 

    The following (name, website, Description, 2011 Financial and other info) provides a description and financial results (as available). This will help you identify and understand objectives of each fund.

    BMO Equal Weight REITs Index ETF

    The BMO Equal Weight REITs Index ETF seeks to replicate, to the extent possible, the performance of an equal weight Canadian REITs index, net of expenses. Currently, the BMO Equal Weight REITs Index ETF seeks to replicate the performance of the Dow Jones Canada Select Equal Weight REIT Index.

    Canadian REIT Income Fund

    Canadian REIT Income Fund (the Fund) is a closed-end investment fund. The Fund's investment objectives are to provide holders of Units (Holders) with quarterly distributions and the opportunity for capital appreciation. The Fund has been created to invest in a portfolio (the Portfolio) comprised primarily of equity securities and convertible debentures of Canadian real estate investment trusts (REITs) and real estate issuers. The Portfolio will be consisted of approximately 80% equity securities and 20% convertible debentures. The Fund's manager is First Asset Investment Management Inc.

    Criterion REIT (formerly: Split REIT Opportunity Trust) - www.firstasset.com/

    Split REIT Opportunity Trust (the Fund) is an investment trust. It has been created to provide investors with exposure to a portfolio of securities of real estate investment trusts (REITs). As of December 31, 2008, the Fund's holdings included Allied Properties Real Estate Investment Trust, Artis Real Estate Investment Trust, Boardwalk Real Estate Investment Trust, Calloway Real Estate Investment Trust, Canadian Apartment Properties Real Estate Investment Trust, Canadian Real Estate Investment Trust, Chartwell Seniors Housing Real Estate Investment Trust, Cominar Real Estate Investment Trust, Crombie Real Estate Investment Trust and Dundee Real Estate Investment Trust. The manager of the Fund is First Asset Funds Inc. and the investment adviser of the Fund is First Asset Investment Management Inc. First Asset Funds Inc. is also the trustee of the Fund.

    First Asset REIT Income Fund

    The Fund's investment objectives are to provide holders with the benefits of high monthly cash distributions together with the opportunity for capital appreciation through the active management of a portfolio of real estate investment trusts (REITs) and real estate corporations that are listed on Canadian stock exchanges. First Asset Investment Management Inc. is the manager of the Fund.

    iShares S&P/TSX Capped REIT Index

    The iShares S&P/TSX Capped REIT Index Fund seeks to provide long-term capital growth by replicating, to the extent possible, the performance of the S&P®/TSX® Capped REIT Index through investments in the constituent issuers of such index, net of expenses. The Index is comprised of securities of Canadian real estate investment trusts ("REITs") listed on the TSX, selected by S&P using its industrial classifications and guidelines for evaluating issuer capitalization, liquidity and fundamentals.

    Morguard Sunstone Real Estate Income Fund

    Invests primarily in Canadian and U.S. real estate investment trusts, real estate operating companies and the companies that provide services to them. Sunstone's opportunistic investment mandate focuses on acquiring assets that can be enhanced through refurbishment programs, management efficiencies or financial restructuring.

    REIT INDEXPLUS Income Fund

    REIT INDEXPLUS has been designed to provide investors with low-cost exposure to the real estate sector through a combination of indexing and active portfolio management. This Fund follows our proven Index/Active strategy with Indexplus Income Fund. The passive component of the portfolio for this Fund will track the S&P/TSX Capped REIT Index while the actively managed component will be invested in a diversified portfolio of Canadian REITs, including REITs that are not constituents of the Index as well as securities of other Canadian issuers operating in the real estate sector and securities of global REITs and real estate companies. Author's note: $0.065 monthly distributions on ~$11.00 NAV.

    Claymore Global Real Estate ETF

    The Claymore Global Real Estate ETF has been designed to replicate, to the extent possible, the performance of the Cohen & Steers Global Realty Majors Index (the "Index"), net of expenses. The investment objective of the Fund is to invest in and hold the Constituent Securities of the Index in the same proportion as they are reflected in the Index. As an alternative to or in conjunction with investing in and holding the Constituent Securities, the Fund may invest in or use derivative instruments to obtain exposure to the performance of the Index. Author's note: $0.2675 CAD quarterly distribution. About 50% of the holdings are US REITs.

    Dundee International REIT

    Dundee International REIT's portfolio currently consists of approximately 12.3 million square feet of gross leasable area of office, logistics and other commercial properties across Germany.

    IPO completed 2011-08. First Canadian REIT investing exclusively outside of Canada, starting with a platform of 292 properties in Germany. $410 million IPO followed by $61 million over-allotment option. $448 million financing obtained from a syndicate of German and French banks.

    Pacrim International Capital

    PICI has its investments in the southern part of the People's Republic of China. The Company's business includes participation in the corrugated paper products and packaging industry in the Pearl River Delta area in the southern part of the People's Republic of China. It focuses on the production and sales of various packaging products, such as paper board, carton, color box and other paper products and printing trademarks. During the fiscal year ended September 30, 2010 (fiscal 2010), the Company generated some revenue from Hong Kong rental properties. During fiscal 2010, it disposed of all the apartments in the People's Republic of China and two in Hong Kong. The two apartments sold in Hong Kong were both located at Robinson Road.

    2011-12: Pacrim International Capital Incadvises that it will be late in filing its audited annual financial statements for the fiscal year ended September 30, 2011 and related Management's Discussion & Analysis, Annual Information Form and CEO and CFO certification of filings (collectively, the "2011 Filings") ("BDO"). The delay is a result of Pacrim having just received notice from its auditor BDO Limited of Hong Kong that it has resigned as Pacrim's auditor. Pacrim understands the unexpected resignation of the auditor is not the result of any "reportable event" as defined under National Instrument 51-102 - Continuous Disclosure Obligations.

    Timbercreek Global Real Estate Fund

    The Fund focuses on meeting its investment objectives by investing in a globally diversified portfolio of securities issued in respect of real estate situated primarily in the industrialized economies. While the bulk of the portfolio consists of publicly traded real estate securities, the Fund intends to invest up to 20% of its total assets directly in Canadian real estate or mortgages secured by Canadian real estate. As of December 31, 2010, the Fund invested in sectors, such as multi-residential, office, retail, diversified, specialty, healthcare, lodging and industrial. Timbercreek Asset Management Ltd. is the manager and portfolio advisor of the Fund. FSX Securities Canada, Inc. is its global investment advisor.

    A unique category of real estate investing is through a private Mortgage Investment Corporation. Conceptually, this is much like an American private mREIT.

    A Mortgage Investment Corporations is an investment fund designed specifically for residential mortgage lending. Owning shares in a MIC enables investors to participate in the income from a diversified and secured pool of mortgages. Most of these are private capital pools, and outside of the scope of this article. That said, the Ontario Securities Commission has created safeguards for investors in MICs (which present financial and investment-knowledge hurdles for both foreign and Canadian investors). A few examples of the non-publicly traded MICs include the following:

     

     

    Name

    Website/Information

    HarbourEdge MIC

    http://www.harbouredge.com/

    HarbourEdge MIC specializes in lending to specific sectors of the mortgage market historically under serviced by private and institutional lenders in terms of loan type amount and geographic location (e.g. smaller markets in Ontario and Atlantic Canada). The portfolio is diversified amongst over 75 mortgages with a mix of types of investments.

    DB MIC

    http://www.cmcapitalcorp.com/v2/private/

    DB MIC is a $110 million private mortgage fund which was created to fill the lending gap caused by the few number of financial institutions operating in Canada. Specifically, DB MIC targets loans which cannot be placed with financial institutions but which represent an acceptable underwriting risk. A typical loan from DB MIC has an interest rate of 8.50% to 11.0% per annum, a one or two-year term, and monthly 'interest only' mortgage payments. DB MIC will only lend in Ontario and has a strong preference for mortgage investments in the Greater Toronto Area and Ottawa.

    Canadian Horizons 1st MIC

    http://www.westcourtcapital.com/sites/all/files/westcourt/CANADIAN%20HORIZONS%201ST%20MIC.pdf

    "Canadian Horizons offers mortgage investment opportunities on commercial, industrial and residential real estate through its Canadian Horizons Mortgage First Investment Corporation (First MIC). The First MIC should be of interest to investors seeking an income producing investment with the following features: Targeted yield of 8% - 9% per annum with the availability of compounding through participation in a dividend reinvestment plan (NYSEARCA:DRIP). First MIC mortgages secured by real property"

    Morrison Laurier MIC

    http://www.morrisonlaurier.ca/

    Provides opportunities to investors in British Columbia, Ontario, Alberta, Saskatchewan, Manitoba and the Province of Quebec to achieve higher returns through participation in a diversified, secure portfolio of select mortgages originated and managed by Morrison Financial Mortgage Corporation under an exclusive investment management arrangement.

    This covers all of the Canadian real estate funds (which must be purchased on the Canadian stock exchanges). Analyzing Canadian REITs, Part IX will continue with classes of investments which are accessible to non-Canadians.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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