Introduction
I have written a few articles on various REITs in recent weeks, including Chartwell Retirement Residences (OTC:CWSRF) and Boardwalk REIT (OTCPK:BOWFF), and the Vanguard Real Estate ETF (VNQ) for those who would prefer an ETF versus cherry-picking of individual REITs. My main thesis is that most REITs provide a reasonably safe yield, as REITs utilize long-term contracts with tenants, which tends to make their distributions relatively stable. This is necessary to protect one's wealth due to potentially runaway inflation as a result of quantitative easing measures being taken by central banks through the global pandemic. REITs will also be beneficiaries of the quantitative easing in the near term with low interest rates and, therefore, low cost of debt, as they tend to utilize more leverage than most companies.
Most articles I have published have been on equity REITs, which is an intuitively easier business to understand, as those companies utilize a high degree of leverage and buy different properties and lease them out to the appropriate business that require their use. The ETF I want to discuss in this article does have many well-regarded equity REITs and has typically has 40-50% of its portfolio in these types of REITs. Mortgage REITs, or "mREITs," make up the other half or so of holdings in the ETF I want to discuss. mREITs invest in mortgages or mortgage-backed securities (MBS), making them real estate debt owners instead of property owners. Within the mREIT space, these entities tend to either focus on residential mortgages and mortgage-backed securities (RMBS) or commercial mortgages and mortgage-backed securities (CMBS).
This ETF I want to discuss is the Global X SuperDividend REIT ETF (NASDAQ:SRET). SRET has a very simple strategy: it holds 30 high-dividend REITs with adequate liquidity. It has greater exposure to mREITs than most REIT ETFs, which often
