Investment Rating - The report maintains a "Weaker than the market" investment rating for the U.S. stock market [1] Core Insights - The U.S. stock market shows initial signs of recovery, with the S&P 500 rising by 1.6% and the Nasdaq by 2.1% [3] - Among 22 sectors, 20 experienced capital inflows, with significant inflows into semiconductor products and equipment (+$46.6 billion) and automotive and automotive parts (+$22.5 billion) [4] - Earnings expectations for the S&P 500 constituents have been adjusted upward by 0.4%, with notable increases in banking (+1.7%) and semiconductor products and equipment (+1.0%) [5] Summary by Sections Price Trends - The S&P 500 increased by 1.6%, while the Nasdaq rose by 2.1% [3] - The automotive and automotive parts sector saw the highest increase at +6.1%, followed by media and entertainment (+4.0%) and food and staples retailing (+3.6%) [3] Capital Flows - Estimated capital inflow for S&P 500 constituents was +$91.7 billion this week, up from +$12.5 billion the previous week [4] - The semiconductor products and equipment sector led with a capital inflow of +$46.6 billion [4] Earnings Forecast - The earnings per share (EPS) forecast for the S&P 500 has been raised by 0.4% this week [5] - The banking sector saw the largest upward revision in earnings expectations at +1.7% [5]

Group 1 - The article discusses the author's investment journey, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently combined long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The primary focus of the author's coverage on Seeking Alpha includes REITs and financials, with occasional insights on ETFs and other stocks influenced by macro trade ideas [1]

Core Insights - The article emphasizes the growing interest in various asset classes, including cryptocurrencies, gold, silver, and rare-earth elements, among investors and financial media [1]. Group 1: Company and Analyst Background - Austin Rogers is identified as a REIT specialist with a professional background in commercial real estate, focusing on high-quality dividend growth stocks to generate a stable passive income stream [1]. - The investing group High Yield Landlord, which Austin contributes to, is noted as one of the largest real estate investment communities on Seeking Alpha, providing exclusive research on the global REIT sector and multiple real money portfolios [1].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The REITs market continued to decline in the first half of October 2025, with liquidity dropping to a historical low. The IDC sector rose slightly, while the consumer and rental housing sectors led the decline. The market showed a rotational style, and the turnover rate of individual bonds continued to fall [4]. - The valuation of REITs has fallen below the 50th percentile, and the dividend - spread relative to the dividend yield of the CSI Dividend Index has widened. The internal rate of return (IRR) of various assets has increased [4]. - The offline quotes of institutional investors have become more cautious, and the discount rate of the initial offering of REITs has decreased. The difference between the initial offering valuation and the secondary - market valuation has converged [4]. - The China Merchants Shekou Rental Housing REIT will have a large - scale restricted - share lifting, and the operating data of two REITs in Q3 2025 have declined [4]. - The expansion of China Resources Commercial REIT has been accepted, and the valuation of the expansion assets of China Resources Youchao REIT has been lowered by 4.6% [4]. 3. Summary According to the Directory 3.1 Market Continues to Decline with Structural Differentiation, and Liquidity Drops to a Historical Low - **Market Performance**: In the first half of October 2025, affected by external shocks, the CSI 300 fell 0.74%. Due to risk - aversion sentiment, funds flowed into safe assets, causing the CSI Dividend Index to rise 2.91% and commodities to rise 3.83%. The yield of the 10 - year Treasury bond declined, and the bond index showed a warming trend. The CSI REITs Index fell 0.93%, similar to the decline in September [14]. - **Sector Performance**: Only the IDC sector rose (0.10%) in the first half of October, while the consumer (-1.48%) and rental housing (-1.26%) sectors led the decline. The decline of the industrial park and public utilities sectors narrowed compared to September, while the decline of other sectors widened [18]. - **Turnover Rate**: Since September, the trading volume of the Shanghai and Shenzhen REITs markets has decreased. In the first half of October, the average daily turnover rate was 0.29%, reaching a historical low but showing a recovery trend after the holiday. The IDC, warehousing and logistics, and rental housing sectors had relatively high average daily turnover rates, while the consumer sector showed a trend of declining trading volume and price [26]. - **Dividend and Valuation**: As of October 15, 2025, the dividend yield of equity - type REITs was 3.94%. The spread relative to the 10 - year Treasury bond yield was 2.10% (at the 42nd percentile), and the spread relative to the CSI Dividend Index was - 0.52% (at the 70th percentile). The dividend yields of rental housing and public utilities were the only ones below the historical 50th percentile. The valuations of both equity - type and concession - type REITs have fallen below the historical 50th percentile [32]. - **IRR**: The latest IRR of equity - type REITs was 4.1% (at the 56th percentile), and that of concession - type REITs was 3.6% (at the 28th percentile). The IRR of various assets has increased, and the IRR of industrial parks, warehousing and logistics, and IDC has reached above the 50th percentile [39]. 3.2 Offline Institutional Quotes Tend to be Cautious, and the Discount Rate of REITs Initial Offering Declines - **Initial Offerings**: In the first half of October 2025, China Huarong CCB Shenyang International Software Park REIT and China Huarong CCB China Overseas Commercial REIT were issued offline, with issuance scales of 1098 million yuan and 1584 million yuan respectively. As of October 15, 2025, there were 75 listed REITs in Shanghai and Shenzhen, with a total market value of 219.1 billion yuan [43]. - **Subscription Funds**: The issuance scales of the two recent REITs were relatively small, and the average offline top - up subscription funds were 282 million yuan. The offline top - up subscription funds for China Huarong CCB China Overseas Commercial REIT were 333 million yuan, and those for China Huarong CCB Shenyang International Software Park REIT were 231 million yuan [46]. - **Subscription Multiples**: The subscription periods of the two REITs overlapped. China Huarong CCB China Overseas Commercial REIT had a record - high offline effective subscription multiple of 320.47 times, with over 1000 products participating in the offline inquiry. China Huarong CCB Shenyang International Software Park REIT had an offline effective subscription multiple of 83.31 times, with relatively low subscription enthusiasm [51]. - **Quoting Attitudes**: The trend of top - price quoting to "secure participation" has cooled down. 84% and 61% of the products of China Huarong CCB China Overseas Commercial REIT and China Huarong CCB Shenyang International Software Park REIT quoted at the upper limit of the inquiry price respectively. The latter had a record - high concession margin [52]. - **Valuation Difference**: The difference between the initial offering valuation and the secondary - market valuation has converged. The predicted dividend yields of China Huarong CCB Shenyang International Software Park REIT and China Huarong CCB China Overseas Commercial REIT in 2026 were 5.24% and 4.21% respectively, with differences of 0.45 pcts and 0.32 pcts compared to comparable REITs [62]. - **Subscription Rate and Listing Performance**: Affected by the lower offline quotes, the participation rates of the two REITs have declined. The offline winning rate of China Huarong CCB Shenyang International Software Park REIT reached 1.2%. The increase in the listing price of REITs has narrowed, and in September, the average increase on the first listing day and the cumulative increase in the first four trading days of newly - listed REITs decreased [66][73]. - **Subscription Yield**: Excluding extreme values, from January to September 2025, the absolute returns of 50 million yuan and 100 million yuan of funds participating in the offline subscription of REITs were 1.7484 million yuan and 3.4967 million yuan respectively, corresponding to an offline yield of 3.50% [74]. 3.3 Shekou Rental Housing REIT to Have a Large - Scale Restricted - Share Lifting, and the Operating Data of Two REITs in Q3 Decline - **Dividend and Operating Data**: Three REITs announced dividend plans, and the operating data of two REITs in Q3 2025 declined. The average daily natural traffic volume of E Fund Shenzhen Expressway REIT in Q3 2025 decreased by 20.43% year - on - year, and the power generation, on - grid electricity, and settlement electricity of CITIC Construction Investment State Power Investment New Energy REIT decreased by 24.66%, 24.85%, and 25.90% respectively [77][79]. - **Restricted - Share Lifting**: China Merchants Shekou Rental Housing REIT will lift restrictions on 48% of its total shares on October 23, 2025. After the lifting, the tradable shares will account for 75% of the total shares. The public offering of China Huarong CCB Shenyang International Software Park REIT and China Huarong CCB China Overseas Commercial REIT ended ahead of schedule, and Guotai Junan Dongjiu New Economy REIT held a general meeting of fund unit holders for its expansion project [84]. 3.4 China Resources Commercial REIT Expansion Accepted, and the Valuation of China Resources Youchao REIT Expansion Assets Lowered - **Queuing Projects**: In the first half of October 2025, the expansion of China Resources Commercial REIT was accepted, and China Resources Youchao REIT announced the feedback response materials for its expansion. As of October 15, 2025, there were 9 initial offering projects in the queue, and China AMC Anbo Warehousing and Logistics REIT has been registered [89]. - **Asset Valuation**: The latest assessment value of the expansion assets of China Resources Youchao REIT was 989 million yuan, a decrease of 4.6% compared to the application draft. The expansion of China Resources Commercial REIT was accepted, and the assessment value of its new assets was 2.444 billion yuan [93]. - **Valuation Pressure in the Under - Review Projects**: The assessment value of the expansion assets of China Resources Youchao REIT has a relatively large downward pressure among similar assets. The rental housing of the Youchao Maqiao project has high occupancy and relatively low rent [94]. - **Tendering and Potential Projects**: In late September and the first half of October 2025, Lanzhou High - tech Investment (Holding) Group Co., Ltd. publicly tendered for a financial advisor for the issuance of a public REIT for the Lanzhou National Biomedical Industry Base Innovation Park [99].

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with consumer discretionary, REITs, and utilities [1]

Core Insights - The Invesco KBW Premium Yield Equity REIT ETF (KBWY) targets income-focused investors with a high trailing 12-month yield of 9.99% and an SEC 30-Day Yield of 8.85% [1][20] - The ETF has a total expense ratio of 0.35% and manages approximately $241 million in assets [1] - KBWY has underperformed compared to its benchmark, the Vanguard Real Estate Index Fund ETF (VNQ), with a total return of 69.19% since inception, significantly lower than VNQ's 198.98% [10][11] Investment Strategy - KBWY tracks a modified-dividend yield-weighted index of small- and mid-cap domestic equity REITs that have competitive dividend yields [2] - The index is reconstituted annually and rebalanced quarterly, with holdings capped at 8% [2] Portfolio Composition - The fund is primarily invested in U.S. companies, with about 75% of its asset value in micro-cap stocks [4] - The portfolio is concentrated, with the top 10 holdings representing 47.5% of the asset value [7] - Key sectors include diversified REITs, healthcare REITs, and office REITs, while retail and residential REITs are downplayed [4] Performance Metrics - KBWY has lagged behind VNQ by 4 percentage points in annualized return since inception [10] - The fund has a higher maximum drawdown of -57.69% compared to VNQ's -42.40% [11] - Over the last three years, KBWY's total return was 4.66%, significantly lower than VNQ's 32.06% [12] Distribution History - Distribution trends have been irregular, with the annual sum of distributions for 2024 projected at $1.56 per share, nearly the same as in 2014 [13] - The fund has experienced a decline in dividend growth, with a 5-year CAGR of -7.82% [18] Competitive Landscape - KBWY stands out for its high yield compared to other U.S. equity REIT ETFs, but it has the worst total return since March 2019 [19] - The fund's expense ratio is competitive at 0.35%, similar to other ETFs in the space [18]

Group 1 - The article highlights the expertise of Austin Rogers as a REIT specialist with a focus on high-quality dividend growth stocks aimed at generating safe and growing passive income streams [1] - The investment philosophy emphasizes a lifelong holding period, prioritizing portfolio income growth over total returns [1] Group 2 - The High Yield Landlord investing group is noted for its extensive research on the global REIT sector and offers various resources including real money portfolios and an active chat room for members [1]

Group 1 - The article highlights Apple Hospitality REIT's compelling dividend yield, strong financials, and trading below book value, which provides a margin of safety for income-focused investors [1] - The author has over 10 years of experience researching various companies across multiple sectors, including commodities and technology, which enhances the credibility of the analysis [2] Group 2 - The author has transitioned from writing a blog to a value investing-focused YouTube channel, indicating a shift in content delivery while maintaining a focus on in-depth company research [2]

Group 1 - The individual began investing in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - Recently, the investment strategy has evolved to combine long stock positions with covered calls and cash secured puts, reflecting a more sophisticated approach to investing [1] - The investment philosophy is fundamentally long-term, with a primary focus on REITs and financials, while occasionally exploring ETFs and other stocks based on macro trade ideas [1]

REIT Sector Performance - The REIT sector averaged a small negative return of -0.73% in September and remains modestly in the red year-to-date at -1.74% [1] - The average REIT underperformed compared to the broader market, which saw gains from major indices: Dow Jones Industrial Average (+2.0%), S&P 500 (+3.6%), and NASDAQ (+5.7%) [1] - The Vanguard Real Estate Index Fund ETF Shares (VNQ) outperformed the average REIT in September with a return of +0.07% and has significantly outperformed year-to-date at +5.72% [1] - The spread between the 2026 FFO multiples of large-cap REITs (16.4x) and small-cap REITs (13.9x) widened, indicating that investors are currently paying an average of 28.8% more for each dollar of FFO from large-cap REITs compared to small-cap REITs [1] Property Type Performance - Only 27.8% of REIT property types averaged a positive total return in September, with a narrow 10.69% total return spread between the best and worst performing property types [6] - Single Family Housing (-5.77%) and Infrastructure (-5.41%) were the worst-performing property types, while Data Centers (+4.92%) and Office (+3.11%) averaged the best total returns among REITs [6][7] - Year-to-date performance shows Hotels (-13.61%), Shopping Centers (-10.74%), and Land (-10.48%) have significantly underperformed, while Health Care (+21.83%) has outperformed with average gains more than double that of any other REIT property type [8][9] FFO Multiples and Valuation - The average P/FFO (2026Y) for the REIT sector rose from 13.8x to 14.1x during September, with 27.8% of property types experiencing multiple expansion [11] - Data Centers (24.6x), Land (22.6x), Manufactured Housing (17.2x), and Multifamily (17.1x) currently trade at the highest average multiples among REIT property types, while Hotels (7.2x) and Office (9.7x) are the only types with single-digit FFO multiples [11][12] Individual Security Performance - Office Properties Income Trust (OPI) saw the largest gain in the REIT sector in September at +54.26%, but remains the 3rd worst performing REIT year-to-date at -65.72% [13] - Wheeler Real Estate Investment Trust, Inc. (WHLR) was the worst-performing REIT in September with a decline of -29.27%, continuing a multi-year share price collapse with a total return of -99.73% over the first three quarters of 2025 [14] - 37.42% of REITs had a positive total return in September, while the average year-to-date total return for REITs in 2025 is -1.74%, significantly lagging behind the +9.61% return for the sector in the first nine months of 2024 [14]