# XRE, thoughts?



## clovis8 (Dec 7, 2010)

I want to buy put some money in a REIT and am leery of buying individual stocks given my recent run in with CCME (see other thread). 

XRE seem like a good choice as it contains most of the major REITs. Anyone else like it? 

I currently have no real estate exposure so want to diversify a little.


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## Belguy (May 24, 2010)

Compare it to ZRE which is more diversified and equal weighted while XRE is more heavily weighted to a few companies.

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=80001

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/summary/?id=56649


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## KaeJS (Sep 28, 2010)

I don't have it because I think there are better opportunities in the market.

However, I think it is a good choice for diversification purposes. 

The approximate 4% dividend is alright and it seems to have a good track record.

Edit: Both ZRE (mentioned above) and XRE have a 0.55% MER, so there is no difference there.


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## Financial Cents (Jul 22, 2010)

XRE is a pretty good and popular pick. 

Decent MER, and REI.UN, HR.UN and REF.UN are the top-3 holdings I recall. Those guys are always making money.

Personally I would not put more than 10% of my total portfolio in REITs, but everyone should have some real estate. Yield is always good.


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## larry81 (Nov 22, 2010)

i own XRE in my TFSA and i am happy


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## Mike59 (May 22, 2010)

The Canadian index actually contains quite a few REIT holdings, I calculated that around 10% of one of my index funds was REITs awhile back.

For a lower cost you essentially have REITs built into the mix by simply buying the Canadian index. 

As an asset class on their own I find them too volatile, and can't tolerate the 2+% swings on some days...


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## clovis8 (Dec 7, 2010)

Mike59 said:


> The Canadian index actually contains quite a few REIT holdings, I calculated that around 10% of one of my index funds was REITs awhile back.
> 
> For a lower cost you essentially have REITs built into the mix by simply buying the Canadian index.
> 
> As an asset class on their own I find them too volatile, and can't tolerate the 2+% swings on some days...


What do you mean by "The Canadian Index"?


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## davext (Apr 11, 2010)

I'd rather get a couple of the REITS that XRE holds.


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## clovis8 (Dec 7, 2010)

davext said:


> I'd rather get a couple of the REITS that XRE holds.



Why if I get to own them in the ETF anyway? Because of the higher dividends?


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## slacker (Mar 8, 2010)

XRE demonstrated the benefit of diversification in the last few weeks when the broad indexes went on a nose dive. XRE pretty much ignored the rest of the world's troubles.


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## Argonaut (Dec 7, 2010)

clovis8 said:


> Why if I get to own them in the ETF anyway? Because of the hirer dividends?


Because of the outrageous MER to hold only a dozen companies. Think about it, a 4% yield essentially turns into 3.45%. REI.UN or REF.UN is the way to play real estate in Canada.


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## KaeJS (Sep 28, 2010)

Argonaut said:


> Because of the outrageous MER to hold only a dozen companies. Think about it, a 4% yield essentially turns into 3.45%. REI.UN or REF.UN is the way to play real estate in Canada.


Agreed. 

If you want more diversification, choose XRE. 
If you don't want to pay the MER, choose REI.UN

Just realize that by choosing REI.UN, you are dependent solely on that REIT. Not that it's anything to worry about. A REIT is a REIT is a REIT for the most part. 

I like my risk, and my risk tolerance is quite high. I'd choose REI.UN and leave the ETF alone. The purpose of a REIT is usually the income. Like Argonaut said above, you don't want to be giving away 1/8 of your income for the ETF.


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## w0nger (Mar 15, 2010)

i hold a position in XRE, but after reading this, maybe i'll reconsider when it comes time to rebalance again... at the time, i just figured that XRE was a good way to hold 2 of the REITS that i would of normally bought seperately...


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## Spidey (May 11, 2009)

It all depends on how much money you will be investing in REITs. If it is enough to, say, purchase the 3 biggest holdings individually, I would go that route (buying the individual holdings) and save the 0.55% MER. If you like, you could then continue to add some of the other holdings over time.


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## CanadianCapitalist (Mar 31, 2009)

I own REI.UN instead of XRE because I don't way to pay 0.55% MER. Yes, there is more risk in holding just one REIT instead of an ETF but my REIT allocation is just 5%, so I'm okay with the risk.


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## fatcat (Nov 11, 2009)

i just bought vanguard VNQ which has an mer of .25 i think and has broad exposure to usa real estate ... 

i also own XRE and eventually will have close to 5% in reit's

i am tempted to drop the XRE though and put it all into VNQ since the usa real estate market is crucial to the entire north american economy

if you want to own real estate, i think this might be a better way to go since it is more diversified and cheaper (even though it's in the usa and not canada)

other opinions welcomed though


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## Financial Cents (Jul 22, 2010)

I don't much about VNQ myself, but the holdings seem much more diversified than XRE. That said, might be a good time to buy VNQ - the housing market in the Status continues to tank.

Always buy when others won't


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## larry81 (Nov 22, 2010)

Anyone know if VNQ can be held in a TFSA ?


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## avrex (Nov 14, 2010)

larry81 said:


> Anyone know if VNQ can be held in a TFSA ?


Yes, VNQ can be held in a TFSA.

As it is a US ETF in a TFSA, you will lose a small amount due to the withholding tax. We don't know what that amount is, as this is a 'young' ETF with no distributions published yet.

A person's decision on whether to hold this in a TFSA or not, might depend on knowing how great that amount turns out to be.


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## Belguy (May 24, 2010)

Has anyone charted the long term returns of REI.UN compared with XRE?


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## HaroldCrump (Jun 10, 2009)

Belguy said:


> Has anyone charted the long term returns of REI.UN compared with XRE?


Here you go (10 year returns) :


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## Eder (Feb 16, 2011)

Belguy said:


> Has anyone charted the long term returns of REI.UN compared with XRE?



Although I own XRE I see that RioCan would have been a better investment. I dont know or care to learn about these REIT's but want a real estate component so I grabbed the lazy solution.


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## warp (Sep 4, 2010)

avrex said:


> Yes, VNQ can be held in a TFSA.
> 
> As it is a US ETF in a TFSA, you will lose a small amount due to the withholding tax. We don't know what that amount is, as this is a 'young' ETF with no distributions published yet.
> 
> A person's decision on whether to hold this in a TFSA or not, might depend on knowing how great that amount turns out to be.


Unless I'm wrong....the US withholding tax on distributions from US reits in a cash account, and a TFSA is 30%..( NOT 15 %, as the tax is with reg stocks)

Its the same with US LP's, ( limited partnreships), like Kinder Morgan.

If I am wrong, someone please correct me.


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## Argonaut (Dec 7, 2010)

Harold, that chart doesn't work because XRE hasn't existed for as long as 10 years. 

If you plot a 5 year chart you'll see that they are almost identical. However, RioCan is outperforming slightly and does not have a MER. It also has a higher yield. I think the choice is fairly simple. If you must be diversified and you have a large portfolio split it in half with REF.UN.


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## clovis8 (Dec 7, 2010)

Thanks for all the help. I am going to go with riocan I think. Do they have a minimum investment? I assume I can hold it in my tfsa?


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## HaroldCrump (Jun 10, 2009)

Argonaut said:


> Harold, that chart doesn't work because XRE hasn't existed for as long as 10 years.
> 
> If you plot a 5 year chart you'll see that they are almost identical. However, RioCan is outperforming slightly and does not have a MER. It also has a higher yield. I think the choice is fairly simple. If you must be diversified and you have a large portfolio split it in half with REF.UN.


The XRE chart seems to start around 2002, so it's close.
And yes, REI is clearly outperforming XRE during any rolling period.


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## andrewf (Mar 1, 2010)

Harold, that chart isn't very useful. For one, REI.UN has a one and a half year head start (and you can't just wave that away) and it's not total return--it ignores distributions.

The adjusted close on Dec 2 2002 for REI.UN wac 5.91, and it closed yesterday at $24.30 for a total annualized return of 18.55%.

XRE for the same period went from 5.87 to 14.61 for a total return of 11.6%.

Interestingly, 5 years ago the adjusted close for XRE was 10.42, and 16.53 for REI.UN, for total returns p.a. of 7.0% and 8.0% respectively. Most of REI's out-performance was in the period before 2006.

Source is yahoo finance, so I make no warranties of the accuracies of this data.


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## andrewf (Mar 1, 2010)

clovis8 said:


> Thanks for all the help. I am going to go with riocan I think. Do they have a minimum investment? I assume I can hold it in my tfsa?


Their minimum investment is 1 share .


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## MikeT (Feb 16, 2010)

Using 10/22/2002 as start date to match available data range for REI.UN.CA and XRE.CA
* 
Growth of $10,000.00
With Dividends Reinvested
REI.UN.CA	XRE.CA
Start date: 10/22/2002	10/22/2002
End date: 03/25/2011	03/25/2011
Start price/share: $12.28	$9.65
End price/share: $24.30	$14.61
Starting shares: 814.33	1,036.27
Ending shares: 1,688.77	1,692.82
Dividends reinvested/share:	$13.29	$5.95
Total return: 310.37%	147.32%
Average Annual Total Return:	18.24%	11.34%
Starting investment: $10,000.00	$10,000.00
Ending investment: $41,040.69	$24,725.69
Years: 8.43. 8.43
*
Using 10/22/2002 as start date to match available data range for REI.UN.CA and XRE.CA

Growth of $10,000.00
Without Dividends Reinvested
REI.UN.CA	XRE.CA
Start date: 10/22/2002	10/22/2002
End date: 03/25/2011	03/25/2011
Start price/share: $12.28	$9.65
End price/share: $24.30	$14.61
Dividends collected/share:	$13.29	$5.95
Total return: 206.15%	113.06%
Average Annual Total Return:	14.20%	9.39%
Starting investment: $10,000.00	$10,000.00
Ending investment: $30,617.88	$21,304.92
Years: 8.43 8.43

Source: http://www.etfchannel.com/symbol/rei.un.ca/


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## fatcat (Nov 11, 2009)

aren't you guys all making the "past returns" mistake here ?

i am happy to pay the .55 to get diversification (rio can is 25% of XRE) in a business that looks as dicey as real estate lately ?

who knows what lies ahead ?

i do get the argument though and would like to save the .55 ....


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## Sampson (Apr 3, 2009)

fatcat said:


> aren't you guys all making the "past returns" mistake here ?


Agreed. While the likelihood of RioCan going under is probably small, you all are basically suggesting that portfolio concentration can result in higher returns. Few people argue against this, and proponents of diversification argue its benefit is to reduce risk, not maximize returns.

One could also compare the 10 year performance of the Nasdaq and Nortel.


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## fatcat (Nov 11, 2009)

> Agreed. While the likelihood of RioCan going under is probably small, you all are basically suggesting that portfolio concentration can result in higher returns. Few people argue against this, and proponents of diversification argue its benefit is to reduce risk, not maximize returns.


 right, my point exactly ... it's animal spirits ... we all do it


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## HaroldCrump (Jun 10, 2009)

But in this case, is risk truly reduced by diversification via the XRE?
What is the correlation coefficient of REI vis-a-vis XRE?
REI is the the largest REIT and already quite diversified in its own right.
Isn't it likely that a sector correction in the RE market will impact other REITs too (in varying degrees) and as a result both XRE and REI will suffer under such situations?

Yes, you are diversifying away the single company risk by buying XRE, however, REI comprises > 25% of XRE so there is substantial exposure anyway.


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## fatcat (Nov 11, 2009)

> But in this case, is risk truly reduced by diversification via the XRE?
> What is the correlation coefficient of REI vis-a-vis XRE?
> REI is the the largest REIT and already quite diversified in its own right.
> Isn't it likely that a sector correction in the RE market will impact other REITs too (in varying degrees) and as a result both XRE and REI will suffer under such situations?
> ...


 good point harold ... you are playing real estate and real estate moves in tandem largely .. well, i bought VNQ because i want to have some us dollar exposure to real estate and because there seems more upside to the us market than the canadian .. the usa and canada market is a good example of real estate NOT moving in tandem though, right


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## Sampson (Apr 3, 2009)

I agree XRE and RIO.UN move in lock step, concentration of XRE in RIO ensures this, BUT, underperformance of XRE is not because of fees, it is because other holdings have not done as well as RioCan.

Maybe this thread is coming full circle. Ultimately, because the risk of RioCan going under should be low, people are probably safe with only one CAD REIT, but remember HR.UN and the Bow. I never thought H&R would ever be close to failing, but had more tenants/companies gone under, and their rental income declined, it was a real risk.

The 0.55% MER is really not that much, and those with reasonably sized portfolios should be able to buy several REITS and mimic the XRE while maintaining fees under 0.55% anyway.

Comes down to portfolio size, and whether one is interested in holding multiple REITs in the first place.


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## clovis8 (Dec 7, 2010)

..


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## 14dmoney (Jan 20, 2011)

So is there any difference between XRE and an indexed mutual fund like this one by iShares?

http://www.theglobeandmail.com/glob...s/funds/summary/?id=56649&companyName=iShares S&P/TSX Capped REIT Index

Once again, REI.UN, HR.UN, and REF.UN comprise 45% of the fund, and the MER is 0.55%, so is there a reason to buy this instead of the ETF?


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## andrewf (Mar 1, 2010)

As far as I can tell, that is the ETF. Is there a ticker for that fund?


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## MikeT (Feb 16, 2010)

Guys, I'm sorry, there is simply NO legitimate reason to own XRE. Giving away 5.5% over ten years for nothing is not a good investment decision.

For the same mer you can buy ZRE which is equal weighted, rather than cap weighted. Much better diversification, if that's your goal. Or Rei.un straight up for zero mer. If you want to add diversification buy one other REIT that does something other than commercial retail outlets and bango, diversified for free.

Those two options are far better than XRE.

XRE = waste of money


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## clovis8 (Dec 7, 2010)

I bought REI.UN this morning.


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## humble_pie (Jun 7, 2009)

having a p aitch dee in archaeology obviously does not help in the investment business


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## clovis8 (Dec 7, 2010)

humble_pie said:


> having a p aitch dee in archaeology obviously does not help in the investment business


I'm not sure what the point if this post is other than an unprovoked insult.


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## larry81 (Nov 22, 2010)

I just noticed that XRE outperformed ZRE by more than 2% YTD


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## FrugalTrader (Oct 13, 2008)

humble_pie said:


> having a p aitch dee in archaeology obviously does not help in the investment business


People are here to learn, no need to insult.


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## humble_pie (Jun 7, 2009)

frugal won't you please explain to me why you would bring forward a remark that's nearly 2 months old, and one which belonged to a context which obtained at that time, a context that you are not seeing.

at that time - nearly 2 months ago - the party had posted somewhat offensively on another thread dealing with precious metals that his view was uniquely righteous & correct because he held a PhD in archaeology. I remember thinking that his argument had merit but his arrogance marred the presentation.

so my remark - nearly 2 months ago - was a sideways dig at someone who had given himself airs.

i did not think that the brief sentence came near the category of an insult. I am certainly sorry that it meets with your disapproval. And i would certainly appreciate it if you could let me know why this tiny solitary post has been dredged out of the past for reproach today.


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## rinoscar (Jan 26, 2010)

*Xre*

Hi,

Simply question concerning XRE. Does it fall under an income investment or an equity investment? 

Well let's make it 2 questions: Last time I checked this etf only holds 13 securities. Is there a "better choice" out there?

Thanks


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## gibor365 (Apr 1, 2011)

rinoscar said:


> Hi,
> 
> Simply question concerning XRE. Does it fall under an income investment or an equity investment?
> 
> ...


For Canadian market you have 2 choices ZRE and XRE. Pretty much the same stocks in both only ZRE - weighted, XRE - capped


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## HaroldCrump (Jun 10, 2009)

rinoscar said:


> Simply question concerning XRE. Does it fall under an income investment or an equity investment?


It has features of both.
Depends on why you ask.
Are you building an asset allocation model?
In my case, I consider my REITs under equity.
Under Income I include only GICs, bonds and money market/HISA.


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## rinoscar (Jan 26, 2010)

HaroldCrump said:


> It has features of both.
> Depends on why you ask.
> Are you building an asset allocation model?
> In my case, I consider my REITs under equity.
> Under Income I include only GICs, bonds and money market/HISA.


Trying to keep a 60equ/40income allocation and I consider mine under income, but then I realized although it pays out income, it only holds stocks. So for that reason I'm thinking it should be held in equity.

Thanks


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## davext (Apr 11, 2010)

I picked up some VNQ a while ago as well since I'm paid in US dollars. I'd never buy US dollars to get a position in VNQ. It's been going up steadily. 

I've been pretty happy and lucky with Dundee Real Estate, D.UN. 17% gain(not including distributions) since October 2010. I have REI too. 

Very happy with not buying XRE anymore. It was good to me, but the individual REITS have been better.


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## warp (Sep 4, 2010)

davext said:


> I picked up some VNQ a while ago as well since I'm paid in US dollars. I'd never buy US dollars to get a position in VNQ. It's been going up steadily.
> 
> I've been pretty happy and lucky with Dundee Real Estate, D.UN. 17% gain(not including distributions) since October 2010. I have REI too.
> 
> Very happy with not buying XRE anymore. It was good to me, but the individual REITS have been better.


 DAVEXT:

Could you please post what % the US withholding tax is on VNQ ?

(This assumes that you hold it in a cash account. or TFSA, not in a registered retirement account)

Thanks in advance for your reply.


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## davext (Apr 11, 2010)

Sorry I bought it on April 5th. I missed the last distribution in March but I'm happy with it because i'm up 5% as of today.


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## warp (Sep 4, 2010)

I called my brokerage....they looked up a couple of accounts that hold/own VNQ. 

VNQ is the Vanguard ETF that holds only US reits.

The withholding tax is 15%, as I thought. This is because it is an ETF, and is treated as one, tax-wise.

Remember that if you hold/own INDIVIDUAL US reit stocks, the withholding tax is 30 %.

Just governments being stupid, as usual.


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## Andre112 (Apr 27, 2011)

gibor said:


> For Canadian market you have 2 choices ZRE and XRE. Pretty much the same stocks in both only ZRE - weighted, XRE - capped


newbie question
what is weighted and what is capped?


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## CanadianCapitalist (Mar 31, 2009)

ZRE is equal weighted. That means the during rebalancing, the component REITs are all weighted equally. If ZRE contains 10 REITs, each would have a weighting of 10%.

XRE is market cap weighted. That means, the weighting of a component REITs is based on their market capitalization (price x number of shares outstanding) are weighted. Here's an example. Say XRE has 10 REITs. REIT A has a market capitalization of 2 billion and market capitalization of the other 9 REITs is 6 billion. REIT A will have a weighting of 25% (2 billion / 8 billion) and the other 9 REITs will have a total weighting of 75%.


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## Andre112 (Apr 27, 2011)

thank you, CC

what are the pros and cons of them?


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## Financial Cents (Jul 22, 2010)

@clovis8 - I think you made a good move (buying REI.UN).

Personally, I'd rather own all 3 top holdings: REI.UN, HR.UN, and REF.UN of XRE instead of XRE. 

If you have no intention of owning any companies outright, and you don't mind the 0.55% MER, XRE is still a solid choice.


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## Pluto (Sep 12, 2013)

Since I held xre since 2008 - 9 and got rid of the last of my holdings this year, I was most interested in this informative thread, and decided to update it with some observations. I pulled up a 5 year chart on xre and compared it to REI. 

Over the last 5 years, XRE out performed REI by approximately 20% (not accounting for yield.) I'm happy as the MER didn't hurt me using the buy on bad new, sell on good news approach. I think the reason for the out-performance is the weaker, more volatile components went down the most during bad times, then out performed off the bottom. 

I got rid of XRE because I think there will be downward pressure on the price to keep the yield attractive, and I'd rather have the capital gain than the distribution. If I don't find anything to buy with the cash, I'll just park it in a short bond etf until more value appears.


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## AltaRed (Jun 8, 2009)

Pluto said:


> I got rid of XRE because I think there will be downward pressure on the price to keep the yield attractive, and I'd rather have the capital gain than the distribution.


I don't think that will happen. The NAV of XRE is the sum of the market value of its constituents. If XRE's price gets too far out of whack from its NAV, the difference will be arbitraged by BlackRock or another smart cookie.


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## Pluto (Sep 12, 2013)

AltaRed said:


> I don't think that will happen. The NAV of XRE is the sum of the market value of its constituents. If XRE's price gets too far out of whack from its NAV, the difference will be arbitraged by BlackRock or another smart cookie.


I'm not sure of your point. Are you aware that in the last cycle xre peaked around 17+ in 2008, then bottomed out at below 7 in approximately 12 months later? This has nothing to do with nav vs market price of xre, and arbitrage. Reits trade similar to bonds: when the price goes down, the yield goes up. Its pretty obvious that in the latter half of 2007, reits were in steep decline to compete with rising interest rates. Presently, reits look to be under downward price pressure in anticipation of higher rates.


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## Sampson (Apr 3, 2009)

All this tells one is that concentration CAN result in higher returns than a diversified mix of holdings, but in this case, the returns post crisis larger came from HR reit. compare XRE to HR and REI over the same period. How many of the top XRE holdings do you need to own to somewhat match XRE? i would say 3-5.


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## Eclectic12 (Oct 20, 2010)

warp said:


> ... Remember that if you hold/own INDIVIDUAL US reit stocks, the withholding tax is 30 % ...


So US REIT stocks are treated differently than US dividend paying stocks?


Cheers


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## andrewf (Mar 1, 2010)

^ I don't think that's right.

Withholding tax is 15% period.


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## Pluto (Sep 12, 2013)

Sampson said:


> All this tells one is that concentration CAN result in higher returns than a diversified mix of holdings, but in this case, the returns post crisis larger came from HR reit. compare XRE to HR and REI over the same period. How many of the top XRE holdings do you need to own to somewhat match XRE? i would say 3-5.


I agree.


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## My Own Advisor (Sep 24, 2012)

Trending under $15 (XRE) today, approaching 52-week low. Anyone buying?


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## Synergy (Mar 18, 2013)

My Own Advisor said:


> Trending under $15 (XRE) today, approaching 52-week low. Anyone buying?


I'm currently at my target REIT allocation and won't be buying more just yet. If I didn't have any exposure I'd be picking away at them for a long term hold of 30+yrs....


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## AltaRed (Jun 8, 2009)

Pluto said:


> I'm not sure of your point. Are you aware that in the last cycle xre peaked around 17+ in 2008, then bottomed out at below 7 in approximately 12 months later? This has nothing to do with nav vs market price of xre, and arbitrage. Reits trade similar to bonds: when the price goes down, the yield goes up. Its pretty obvious that in the latter half of 2007, reits were in steep decline to compete with rising interest rates. Presently, reits look to be under downward price pressure in anticipation of higher rates.


You said you didn't like XRE because there would be downward pressure on the price to keep the yield attractive. My point was XRE behaves as the sum of its constituents so it makes no real difference whether one holds XRE or the individual components of XRE. It may be I misunderstood your point... i.e. perhaps you meant it didn't pay to own REITs at all, in whatever form? 

FWIW, I'd never own XRE itself due to its MER. I'd own some of the underlying REITs.


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## AltaRed (Jun 8, 2009)

sunnyzjj said:


> I like XRE and personaly own it. It's good price right now. With the increasing house price in Canada, it should be a good investment in the long run.


You need to look at the underlying REITs that are in XRE. It is dominated by office, retail, industrial and most anything other than houses.


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## youngdad3 (Jun 29, 2013)

I'm piling up on XRE in the wife's TFSA because since ETFs are free to buy with questrade (well almost free) I can live with the 0.55 MER but once her chunk gets bigger (10-12k$) I'll sell and buy 2-3 REITS directly instead. that's what I'm doing in my personal account.


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## Hawkdog (Oct 26, 2012)

My Own Advisor said:


> Trending under $15 (XRE) today, approaching 52-week low. Anyone buying?


I have an order in, but it didn't fill today maybe tomorrow. Looking to add under 15.00.
I own both XRE and REI.un. I also own TPH and have been adding to it when its under 5.50. It has been doing well as of late.


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## gibor365 (Apr 1, 2011)

youngdad3 said:


> I'm piling up on XRE in the wife's TFSA because since ETFs are free to buy with questrade (well almost free) I can live with the 0.55 MER but once her chunk gets bigger (10-12k$) I'll sell and buy 2-3 REITS directly instead. that's what I'm doing in my personal account.


That's what I did last months...sold XRE.....now I have REI, HR, CUF and AX in 4 different accounts... no MER and higher yield


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## Squash500 (May 16, 2009)

gibor said:


> That's what I did last months...sold XRE.....now I have REI, HR, CUF and AX in 4 different accounts... no MER and higher yield


 It depends on how much money you have. IMHO it's not worth buying any individual stock unless you have at minimum $10000 to put into each of REI, HR, CUF and AX.....as an example. Otherwise you're probably better off to just pay the MER and own XRE.


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## My Own Advisor (Sep 24, 2012)

I hear ya Squash500.

This is why, when I have enough 4-5 REITs to DRIP in my TFSA (getting there), I will sell off XRE in favour of a lower-cost product. For now, the XRE yield is 5%, which isn't bad. I have 2 REITs DRIPping now, REI.UN and HR.UN. Working on others like D.UN, CWT.UN and might buy CUF.UN in 2014.

I figure owning 4-5 REITs in my portfolio, with values >$5,000 will be good diversification for the rest of my portfolio.


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## Sampson (Apr 3, 2009)

Wow. What kind if % allocations to REITs do people have.

I have aonly a 5%, because 45% of my networth is already tied to residential real estate.

4 holdings, $10,000 ea, 5% allocation means a portfolio of $800,000. Perhaps people have stronger weightings, but how do you reconcile, (1) additional exposure from home ownership, if you own a home and/or rental, (2) lower performance long term of REITs compared to equities?

Doesn't seem worthwhile to hold a tonne to me.


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## gibor365 (Apr 1, 2011)

Squash500 said:


> It depends on how much money you have. IMHO it's not worth buying any individual stock unless you have at minimum $10000 to put into each of REI, HR, CUF and AX.....as an example. Otherwise you're probably better off to just pay the MER and own XRE.


How did you come to $10,000 per stock?! If you have just 20,000 REIT allocation in XRE lost Earnings: (impact of MER fee on investment
measured by the loss of potential earnings.) for 10 years with annual ROR 5% will be equal $1,910 ! To buy 4 REITs cost me $28. Do calculation....

Even for 1 year holding XRE ($20,000) , lost earning $120, 4 times higher than owning 4 stoxks directly... and those 4 are about 50% of XRE allocation


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## larry81 (Nov 22, 2010)

I used my yearly TFSA contribution to switch my XRE holding to ZRE.

My TSFA account is filled with ZRE


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## Sampson (Apr 3, 2009)

gibor said:


> How did you come to $10,000 per stock?!


Post #73.

I don't understand your post and its relation. I never stated that un-bundling XRE is a bad idea.


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## gibor365 (Apr 1, 2011)

Sampson said:


> Post #73.
> 
> I don't understand your post and its relation. I never stated that un-bundling XRE is a bad idea.


and i don't understand you  it was reply on Squash500 post above and it's quoted.

just to add... any amount above 5,000 will be cheaper to hold in 4 mentioned stocks than in XRE even for 1 year!
btw, did more research,
XRE tptal gain for 5years is 88.6%, average gain of 4 stocks (REI, HR, CUF and AX) = 90.75% - practically the same, however, XRE yield is 5.07% and average yield of 4 stocks is 6.88%
... the difference probably where you pay MER


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## Eder (Feb 16, 2011)

Owning your own home may be alot more RE exposure than most should have...especially leveraged 10-1. I think that is what Sampson mentioned. I ended up selling my home years ago simply because of it's disproportionate weighting in my retirement portfolio. (plus I really hated cutting the grass)


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## My Own Advisor (Sep 24, 2012)

I certainly don't have $10,000 per REIT yet, working on it. Hopefully a few years. Working on the $800,000 portfolio, a few more years... 

I need to get caught up to members of CMF who are well on their way to retirement or already loving it.


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## Sampson (Apr 3, 2009)

gibor said:


> and i don't understand you  it was reply on Squash500 post above and it's quoted.


sorry gibor, i really missed this quite blatently. all I have to say is that I'm sorry Rob Ford smoke crack, hired prostitutes used cocaine, and all the other horrible things to cause my bad post.


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## andrewf (Mar 1, 2010)

^Don't worry, it's in the past! No one should be held accountable for the things they've done, especially when they are in the past. (Did Yogi say that?)


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## HaroldCrump (Jun 10, 2009)

andrewf said:


> ^Don't worry, it's in the past! No one should be held accountable for the things they've done, especially when they are in the past.


Rob Ford doesn't realize that all is forgiven and forgotten if he resigns.
Apparently, in Ontario, if you resign, the public will even forget billions of dollars of sleaze, grafting, waste, and profligacy.
We have a very recent precedent for this.


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