Last updated: 13:25 / Tuesday, 18 August 2015
Strategic Beta ETFs

Guggenheim Launches S&P 500 Equal Weight Real Estate ETF

Imagen
Guggenheim Launches S&P 500 Equal Weight Real Estate ETF
  • The ETF tracks the newly created S&P 500 EWRE Index, which equally weights the index constituents in the S&P 500 that are classified in the Global Industry Classification Standard (GICS) Real Estate Industry Group
  • The new real estate sector includes equity REITs and real estate management and development companies.
  • Real estate securities offer potentially attractive long-term total returns and EWRE’s underlying portfolio will be comprised primarily of equity REITs which have a history of providing consistent, above-average dividends

Guggenheim Investments recently announced the launch of Guggenheim S&P 500 Equal Weight Real Estate ETF (EWRE). The ETF tracks the newly created S&P 500 EWRE Index, which equally weights the index constituents in the S&P 500 that are classified in the Global Industry Classification Standard (GICS) Real Estate Industry Group with an emphasis on exchange- traded equity REITs and real estate management and development companies, and excluding Mortgage REITs.

“Recognizing that real estate is evolving into a separate asset class as a result of its growing importance to advisors and investors searching for income and capital appreciation and underscoring our firm’s commitment to providing clients with innovative investment solutions, Guggenheim is first to market today with a new equal-weighted sector ETF which could have considerable impact on portfolio planning and research,” said William Belden, Managing Director of Product Development for Guggenheim Investments.

The new real estate sector includes equity REITs and real estate management and development companies. Mortgage REITs, which facilitate the financing of commercial and residential real estate, will remain in the financials sector. On September 16, 2016, S&P Dow Jones will implement the GICS real estate sector change as a part of their annual index rebalancing.

“There are several reasons real estate can be considered an attractive asset class,” Belden said. “First, real estate securities offer potentially attractive long-term total returns coming from both capital appreciation and higher-than-average income when compared to other equities. Second, EWRE’s underlying portfolio will be comprised primarily of equity REITs, which have a history of providing consistent, above-average dividends which can be used to meet current income needs or reinvested to accumulate wealth. Also, investing in real estate securities can be used as a hedge against inflation.”

EWRE becomes the 15th equal-weighted ETF in Guggenheim’s product line. Guggenheim pioneered the concept of strategic beta with the launch of Guggenheim S&P 500 Equal Weight ETF (RSP) in April 2003. The Firm’s strategic beta ETFs assets totaled $18.7 billion as of July 31, 2015.

“The time-tested equal weight strategy can help long-term performance by reducing the bias towards the largest individual companies within a particular cap-weighted strategy,” Belden said. “An equal-weight approach also may enhance portfolio diversification by reducing concentration risk often found in cap- weighted indices and provide a more balanced exposure across market capitalizations.”

menu
menu