Key Points REITs are great additions to your portfolio. Realty Income is a top-notch REIT. The Schwab U.S. REIT ETF is a promising REIT ETF. 10 stocks we like better than Realty Income › Investing in real estate can help take your portfolio to the next level. It increases your diversification and enables you to generate passive income, thereby enhancing your risk-adjusted returns. These qualities are why most financial advisors recommend that investors have some exposure to real estate investment ...

Core Viewpoint - The Columbia Research Enhanced Real Estate ETF (CRED) launched at an inopportune time, coinciding with a bear market in real estate, and has since delivered a negative return of 1.6% while managing only $3.1 million in assets, raising liquidity concerns for investors [1] Group 1: Market Conditions and Rate Cuts - The real estate sector has been in a downturn, with the Vanguard Real Estate ETF (VNQ) losing approximately 24% from its peak in December 2021 to the end of 2025, primarily due to the Federal Reserve's rate hikes from near zero to over 5% starting in March 2022 [2] - The Fed is expected to cut rates in December 2025, with forecasts suggesting further cuts in 2026, potentially lowering the fed funds rate to between 3% and 3.25% from the current 3.75% to 4% [2] Group 2: Impact of Lower Rates - Lower interest rates will reduce the cost of debt for property acquisition and development, enhance the attractiveness of REIT dividends compared to Treasury yields, and lower cap rates, thereby boosting property valuations [3] - CRED, which yields just over 4%, will benefit from a falling rate environment, making its income stream more competitive [3] Group 3: CRED's Investment Strategy - CRED allocates about 28% to infrastructure REITs, which are less sensitive to interest rate changes compared to traditional property types, providing steady cash flows from long-term leases [4] - However, this defensive positioning may limit upside potential when rates fall, as traditional REITs with higher leverage could benefit more from easing cycles [6] Group 4: Comparison with Alternatives - The Schwab U.S. REIT ETF (SCHH) offers a similar portfolio with lower liquidity risk, charging only 0.07% in annual fees compared to CRED's 0.33%, and has $7 billion in assets, providing greater scale and trading volume [7] Group 5: Future Considerations - The key factor for CRED in 2026 will be whether the Fed implements the expected rate cuts, alongside the performance of its infrastructure-heavy portfolio in capturing recovery opportunities [8]

Core Viewpoint - Trump Media & Technology Group Corp. has launched a suite of exchange-traded funds (ETFs) aimed at "patriotic investors" who wish to invest in American companies, but potential investors should be cautious about the associated fees [1][4]. Group 1: ETF Overview - The ETFs are designed to invest in "securities with a Made in America focus" across various industries, with the goal of generating financial returns [2]. - The suite includes five ETFs: Truth Social American Security & Defense ETF (TSSD), Truth Social American Next Frontiers ETF (TSFN), Truth Social American Icons ETF (TSIC), Truth Social American Energy Security ETF (TSES), and Truth Social American Red State REITs ETF (TSRS) [3]. Group 2: Fee Structure - All five Truth Social ETFs have an annual expense ratio of 0.65% (65 basis points), which may be surprising for income-seeking investors [4]. - In comparison, major ETFs like Schwab U.S. REIT ETF charge only 7 basis points, highlighting a significant difference in fees that could accumulate over time [5].

Core Viewpoint - The Schwab U.S. REIT ETF (SCHH) is at a pivotal moment as it awaits favorable interest rate changes, with the potential for real estate to shift from a defensive to an offensive growth mode by 2026 [1][2]. Interest Rate Impact - The trajectory of SCHH is heavily influenced by the 10-year Treasury yield, which competes with REIT dividends for investor capital. A decline in Treasury yields to the 3.0% to 3.5% range could make REITs more attractive [2]. - Lower long-term interest rates lead to cap rate compression, increasing property values as the discount rate for future cash flows decreases. This is particularly beneficial for SCHH, which includes industrial REITs like Prologis [3]. Commercial Real Estate Maturity Wall - In 2026, approximately $162 billion in commercial real estate loans will mature, a 56% increase from $104 billion in 2025. The refinancing environment will be crucial for SCHH, as high rates could lead to dividend cuts [4]. Portfolio Composition - SCHH's portfolio consists of 165 holdings, with Welltower being the largest at 9.84%, which has seen over a 50% increase year-to-date. This indicates resilience in healthcare REITs despite challenging rate conditions [6]. - The performance of SCHH in 2026 will depend on which subsectors, such as infrastructure and industrial properties, gain momentum. Infrastructure REITs make up about 18% of the portfolio, while industrial and logistics properties account for 15% [7]. Alternative Investment Options - The Fidelity MSCI Real Estate Index ETF (FREL) offers a similar investment strategy with a slightly higher expense ratio but includes real estate services companies, which could benefit from improved property sales in 2026 [8]. Key Signals for Future Performance - The critical indicators for SCHH's performance over the next year include whether the 10-year Treasury yield falls below 4% and the ability of its industrial and healthcare REIT holdings to maintain occupancy and rental growth amid refinancing challenges [9].

Core Insights - The Schwab U.S. REIT ETF (SCHH) has experienced a slight decline of approximately 2% over the past year as investors await favorable interest rate conditions [1] - The 10-year Treasury yield is a significant factor influencing SCHH's performance, with expectations of a decline to the 3.0% to 3.5% range by late 2026, making REIT dividends more attractive [2] Interest Rate Impact - Lower long-term interest rates lead to cap rate compression, increasing property values as the discount rate for future cash flows decreases [3] - A warehouse's value increases when financing costs drop from 6% to 4%, directly benefiting SCHH's net asset value due to its holdings in industrial REITs [3] Commercial Real Estate Maturity Wall - Approximately $162 billion in commercial real estate loans are set to mature in 2026, a 56% increase from $104 billion in 2025, with many loans needing refinancing at potentially higher rates [4] - The refinancing environment is critical for SCHH, as elevated rates near 6% could lead to dividend cuts, while a drop toward 4% would ease the crisis [4][5] Performance of Holdings - Welltower has seen a rise of over 50% year-to-date, while Digital Realty has declined by 14% due to cooling demand for AI infrastructure [5] - The relationship between Treasury yields and property values indicates that lower rates enhance the attractiveness of REITs [5]

Core Insights - The Schwab U.S. REIT ETF (SCHH) provides investors with a low-cost and liquid way to gain exposure to the U.S. commercial real estate market [1] Group 1 - The ETF aims to replicate the performance of the U.S. commercial real estate sector [1]

Core Viewpoint - Real estate investment trusts (REITs) are expected to attract more income investors in 2024 as declining Treasury yields may draw investors back to high-yielding REITs and dividend stocks [1][4]. REIT Performance and Market Conditions - Many REITs faced challenges in 2022 and 2023 due to rising interest rates, which increased property acquisition costs and created macroeconomic headwinds for tenants [2]. - The Federal Reserve is anticipated to cut benchmark rates five times in 2024 and 2025, stabilizing many REITs, although Treasury yields may not decline as quickly due to concerns over inflation and government debt [3]. - REITs have been trading sideways recently, but a potential rally is expected as Treasury yields decline [4]. Investment Opportunities in REIT ETFs - Investors looking to capitalize on the anticipated trend without purchasing individual REITs may consider diversified exchange-traded funds (ETFs) [5]. Vanguard Real Estate Index Fund ETF (VNQ) - VNQ is the largest REIT ETF, tracking 153 stocks across 17 sectors, with significant investments in healthcare (15%), retail (13.5%), and industrial REITs (11.3%) [6]. - VNQ has a market cap of $89.81, a 52-week range of $76.92 to $99.20, and an effective yield of 3.62% [8][9]. - It has a low expense ratio of 0.13% and a minimum investment of $1, making it accessible for most investors [9]. Schwab U.S. REIT ETF (SCHH) - SCHH tracks the Dow Jones Equity All REIT Capped Index, holding 124 stocks, with top holdings in Welltower (9.9%), Prologis (8.5%), and American Tower (4.9%) [10]. - It offers a 30-day SEC yield of 3.6% and has a low expense ratio of 0.07% with no minimum investment requirement [10][12]. Real Estate Select Sector SPDR Fund (XLRE) - XLRE focuses on data center, logistics, and communications REITs, which are expected to benefit from trends in cloud computing, AI, and e-commerce [13][15]. - It holds 31 stocks, with top holdings in Welltower (11.1%), Prologis (9.6%), and American Tower (7.1%) [15]. - XLRE has a 30-day SEC yield of 3.48%, a low expense ratio of 0.08%, and no minimum investment threshold, offering a blend of income and growth potential [16].