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Property ETFs have been one of the worst investments in the exchange-traded fund universe over the last couple of years. Some major sector indices have fallen over 75% in price since their peak in early 2007, and sentiment towards real estate remains firmly negative. Nevertheless, as a recent press release from FTSE, one of the main index providers, reminds us, property remains widely recognised as one of the four core asset classes in institutional investment portfolios. It also represents around half of global wealth.
By comparison with the US ETF market - where two large funds, the Vanguard REIT ETF and the DJ Wilshire REIT ETF, have around US$2 billion in invested assets, and there is a wide range of other funds to choose from - the European property ETF sector remains small, with just over €0.5 billion invested. European property ETF assets are more diversified geographically, however, than US ETFs, which are overwhelmingly focussed on the domestic market.
Here are tables showing all the available European property ETFs, split by geographical coverage. The countries of listing are also shown, together with the funds' total expense ratios and assets under management, as given in the latest Deutsche Bank "ETF Liquidity Trends" report.
| Global Property ETFs |
Listings |
Total Expense Ratio |
Assets Under Management (€m) |
| iShares FTSE EPRA/NAREIT Global Property Yield |
CH, DE, FR, GB, GB$, IT, NL |
0.59% |
46.2 |
| EasyETF FTSE EPRA/NAREIT Global |
FR |
0.50% |
10.2 |
| American Property ETFs |
Listings |
Total Expense Ratio |
Assets Under Management (€m) |
| iShares DJ Stoxx Americas 600 Real Estate (DE) |
DE |
0.70% |
2.7 |
| iShares FTSE EPRA/NAREIT US Property Yield Fund |
CH, DE, FR, GB, GB$, IT, NL |
0.40% |
39.4 |
| Asian Property ETFs |
Listings |
Total Expense Ratio |
Assets Under Management (€m) |
| iShares FTSE EPRA/NAREIT Asia Property Yield Fund |
CH, DE, FR, GB, GB$, IT, NL |
0.59% |
52.5 |
| iShares DJ Stoxx Asia Pacific 600 Real Estate (DE) |
DE |
0.70% |
7.5 |
| European Property ETFs |
Listings |
Total Expense Ratio |
Assets Under Management (€m) |
| iShares DJ Stoxx 600 Real Estate (DE) |
DE |
0.45% |
11.1 |
| EasyETF FTSE/EPRA Europe |
DE, FR |
0.45% |
90 |
| iShares FTSE/EPRA European Property |
CH, DE, FR, GB, IT, NL |
0.40% |
157.5 |
| EasyETF FTSE/EPRA Eurozone |
DE, FR, IT |
0.45% |
126.6 |
| iShares FTSE EPRA/NAREIT UK Property Yield |
CH, GB, IT |
0.40% |
30.6 |
| ComStage ETF DJ Stoxx 600 Real Estate TR |
DE |
0.25% |
5.9 |
The real estate investment trust ("REIT") structure that is so common in the US market, and which is the legal form used by many of the securities underlying these ETFs, is a fairly recent arrival in Europe. To recap, a typical REIT obtains a reduction in, or elimination of corporate income taxes, in exchange for a commitment to distribute all, or nearly all of its annual profits to investors. REIT-enabling laws have been passed in the last five years in the UK, Germany, France and Italy, as a result of which many previously-listed property companies converted to investment trust status.
Since not all countries have adopted equivalent legislation, the main index compilers - FTSE and Dow Jones Stoxx - include both REITS and other listed property companies in the versions of the indices tracked by the ETFs in the table. FTSE does calculate both REIT and non-REIT indices, for those interested in the difference between the two subsectors.
REITs' emphasis on the distribution of income to investors, combined with the recent fall in property equity values, means that there are now some apparently eye-watering yields on offer from the ETFs. Figures in the table below are taken from ETF issuers' websites, and from the DJ Stoxx index factsheets. The EasyETF fund yields are calculated as the total 2008 fund distributions divided by current ETF prices, which may explain some small discrepancies with the stated yields of some iShares ETFs based on the same indices.
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