In this post, we will compare the best Canadian REITs ETF available in Canada. First, we will discuss the benefits of owning this type of investments. Then, for each ETF, we will provide the fund’s objective, MER, holdings, historical performance and dividend distribution.
What’s a REIT
Real estate investment trusts are companies that owns, operates, or finances income-generating real estate. REITs can invest in various type of properties such as: apartment buildings, data centers, hotels, medical facilities, offices, retail centers, cell towers and warehouses.
REITs can be privately owned, but most are publicly traded. Investors can easily invest in a real estate investments trusts by purchasing its stock on the Toronto stock exchange. Canadian REITs are popular for various reasons:
- They offer diversification to an existing investment portfolio. Real estate assets are unique and have generally low correlation with other types of existing assets;
- They are considered to be a natural hedge against inflation;
- They offer a steady and stable income. REITs revenues come mostly from rent paid by occupants of their buildings and properties. This type of revenues is quite stable compared to any other type of commercial activity.
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What’s an REIT ETF
It’s an exchange trader fund that invests primarily in a portfolio of REITs. The manager of the ETF can either track a REIT index, pursue an active strategy or a mix of both.
Canadian REITs ETF are great as they offer a low cost way to get exposure to large number of REITs. The holder of a REIT ETF can benefit from diversification which lowers the overall risk.
What to look for in a REIT ETF
When looking for the Best Canadian REITs ETF, please make sure to check for the criteria’s below:
- Sector allocation matters in REIT ETF. Investors should check whether the ETF invests in various sectors. The idea is to avoid REITs that are overly exposed to one type of properties. Generally speaking, a mix of industrial, retail and residential is appreciated.
- Yield distribution;
- Performance;
- Management expense ratio.
Table 1: Canadian REITs ETF list
| Name | AUM | Div yld |
| MREL – Middlefield REIT Indexplus | 109 | 6.12 |
| RIT – CI First Asset Canadian REIT | 778 | 4.24 |
| ZRE – BMO Equal Weight Reits Index | 828 | 4.20 |
| XRE – Ishares S&P TSX Capped REIT Index | 1,422 | 2.95 |
| VRE – Vanguard FTSE CDN Capped REIT Index | 338 | 3.05 |
Source: Yahoo finance
Table 2: MER Comparison and historical performance
Updated daily
| ETF | MER |
| MREL | 0.98 |
| RIT | 0.86 |
| ZRE | 0.61 |
| XRE | 0.61 |
| VRE | 0.38 |
ZRE – BMO Equal Weight Reits Index, and RIT – CI First Asset Canadian REIT had the best historical performance (3 years and 5 years)
VRE Vanguard FTSE CDN Capped REIT Index has the lowest management expense ratio of the ETFs analyzed.
The short-term performance of RIT was the highest.
Considering its high dividend yield and historical performance, ZRE BMO Equal Weight Reits Index is our preferred Canadian Reits ETF.
MREL – Middlefield REIT Index plus ETF
IDR has been designed to provide investors with low-cost exposure to the global real estate sector through a combination of indexing and active portfolio management.
65% of the funds’ assets are invested in the Canadian market (34% in the United states and 2% International).
IDR Morningstar rating
IDR ETF Holdings
TOP 10 HOLDINGS |
| Canadian Apartment Properties REIT SmartCentres Real Estate Investment Trust First Service Corp RioCan Real Estate Investment Trust Granite Real Estate Investment Trust Prologis Inc First Capital Real Estate Investment Trust Welltower Inc Colliers International Group Inc WPT Industrial Real Estate Investment Trust |
IDR ETF Sector allocation
| Name | Weight % |
| Industrial REITs | 24.4 |
| Retail REITs | 19.5 |
| Residential REITs | 18.6 |
| Real Estate Services | 7.9 |
| Specialized REITs | 6.9 |
| Healthcare REITs | 6.7 |
| Office REITs | 5.9 |
| Diversified REITs | 4.4 |
| Asset Management & Custody Banks | 2.9 |
| Hotels, Resorts & Cruise Lines | 2.8 |
RIT – CI First Asset Canadian REIT ETF
RIT is an actively managed portfolio comprised primarily of securities of Canadian real estate investment trusts, real estate operating corporations and entities involved in real estate related services. Up to 30% of the Fund’s assets may be invested in foreign securities.
RIT Morningstar rating
RIT ETF Distribution
| Ex-Div Date | Record Date | Pay Date | Amount |
|---|---|---|---|
| 5/24/2023 | 5/25/2023 | 5/31/2023 | 0.0675 |
| 4/21/2023 | 4/24/2023 | 4/28/2023 | 0.0675 |
| 3/24/2023 | 3/27/2023 | 3/31/2023 | 0.0675 |
| 2/21/2023 | 2/22/2023 | 2/28/2023 | 0.0675 |
| 1/24/2023 | 1/25/2023 | 1/31/2023 | 0.067 |
Sector breakdown
| Sector | Weight % |
| Residential | 30.73 |
| Industrials | 21.07 |
| Retail | 18.64 |
RIT ETF Holdings
| Name | % |
| CANADIAN APARTMENT PPTYS REIT | 4.96 |
| TRICON RESIDENTIAL INC | 4.88 |
| DREAM INDUSTRIAL REIT | 4.87 |
| SUMMIT INDUSTRIAL INCOME REIT | 4.70 |
| INTERRENT REIT | 4.68 |
| GRANITE REIT | 4.62 |
| KILLAM APT REAL ESTATE INVT TR | 4.21 |
| MINTO APARTMENT REIT | 4.06 |
| CHARTWELL RETIREMENT RESIDENCE | 4.01 |
| CHOICE PROPERTIES REIT | 3.74 |
ZRE – BMO Equal Weight Reits Index ETF
ZRE is an index fund that tracks the Solactive Equal Weight Canada REIT Index. It invests in Canadian securities that fall within the Real Estate Investment Trust sector. Each security in the Index is allocated a fixed weight rather than a market capitalization weight. This is the largest REITS ETF by asset under management with 1.3 Billion.
| Ex-Div Date | Record Date | Pay Date | Amount |
|---|---|---|---|
| 5/30/2023 | 5/31/2023 | 6/5/2023 | 0.0900 |
| 4/26/2023 | 4/27/2023 | 5/2/2023 | 0.0900 |
| 3/29/2023 | 3/30/2023 | 4/4/2023 | 0.0900 |
| 2/24/2023 | 2/27/2023 | 3/2/2023 | 0.0900 |
| 1/27/2023 | 1/30/2023 | 2/2/2023 | 0.0900 |
ZRE Morningstar rating
Sector allocation
| Sector | Weight % |
| Retail | 27.87% |
| Residential | 21.94% |
| Industrial | 18.55% |
| Diversified | 13.63% |
| Office | 8.90% |
ZRE ETF Holdings
| Weight (%) | Name |
| 4.98% | WPT INDUSTRIAL REAL ESTATE INVESTMENT TRUST |
| 4.96% | SUMMIT INDUSTRIAL INCOME REIT |
| 4.76% | CROMBIE REAL ESTATE INVESTMENT TRUST |
| 4.63% | SMARTCENTRES REAL ESTATE INVESTMENT TRUST |
| 4.63% | RIOCAN REAL ESTATE INVESTMENT TRUST |
| 4.61% | INTERRENT REAL ESTATE INVESTMENT TRUST |
| 4.61% | CHARTWELL RETIREMENT RESIDENCES |
| 4.59% | MINTO APARTMENT REAL ESTATE INVESTMENT TRUST |
| 4.58% | CHOICE PROPERTIES REAL ESTATE INVESTMENT TRUST |
| 4.57% | H&R REAL ESTATE INVESTMENT TRUST |
VRE – Vanguard FTSE CDN Capped REIT Index ETF
VRE Seeks to track the performance of the FTSE Canada All Cap Real Estate Capped 25% Index (before fees and expenses). It provides exposure to Canadian large-, mid-, and small-cap stocks in the Real Estate industry.
Vanguard FTSE CDN Capped REIT Index ETF has the lowest MER among the ETFs selected for this post.
VRE ETF Holdings
As of May 31st
| Holding name | % Weight |
| Canadian Apartment Properties REIT(CAR.UN) | 15.23 |
| FirstService Corp.(FSV) | 11.57 |
| RioCan REIT(REI.UN) | 10.91 |
| Allied Properties REIT(AP.UN) | 8.76 |
| Granite REIT(GRT.UN) | 7.63 |
| H&R REIT(HR.UN) | 7.29 |
| Colliers International Group Inc.(CIGI) | 6.48 |
| First Capital REIT(FCR.UN) | 6.25 |
| SmartCentres REIT(SRU.UN) | 6.18 |
| Choice Properties REIT(CHP.UN) | 6.05 |
Sector allocation
| Sector | Fund |
| Retail REITs | 23.2% |
| Office REITs | 19.6% |
| Real Estate Services | 18.1% |
| Residential REITs | 17.7% |
| Diversified REITs | 9.0% |
| Industrial REITs | 7.7% |
| Real Estate Holding and Development | 4.6% |
| Total | 100.0% |
VRE ETF Distribution
Distribution frequency: Monthly
| Ex-Div Date | Record Date | Pay Date | Amount |
|---|---|---|---|
| 5/31/2023 | 6/1/2023 | 6/8/2023 | 0.0672 |
| 4/28/2023 | 5/1/2023 | 5/8/2023 | 0.0672 |
| 3/31/2023 | 4/3/2023 | 4/10/2023 | 0.0672 |
| 2/28/2023 | 3/1/2023 | 3/8/2023 | 0.0672 |
| 1/31/2023 | 2/1/2023 | 2/8/2023 | 0.0672 |
XRE – iShares S&P/TSX Capped REIT Index ETF
Seeks to provide long-term capital growth by replicating the performance of the S&P/TSX Capped REIT Index, net of expenses.
| Ex-Div Date | Record Date | Pay Date | Amount |
|---|---|---|---|
| 5/24/2023 | 5/25/2023 | 5/31/2023 | 0.0580 |
| 4/24/2023 | 4/25/2023 | 4/28/2023 | 0.0580 |
| 3/22/2023 | 3/23/2023 | 3/31/2023 | 0.0570 |
| 2/22/2023 | 2/23/2023 | 2/28/2023 | 0.0570 |
| 1/25/2023 | 1/26/2023 | 1/31/2023 | 0.0570 |
XRE Morningstar rating
XRE ETF Holdings
| Name | Weight % |
|---|---|
| CANADIAN APARTMENT PROPERTIES REAL | 15.27 |
| RIOCAN REAL ESTATE INVESTMENT TRUS | 10.38 |
| ALLIED PROPERTIES REAL ESTATE INVT | 8.81 |
| GRANITE REAL ESTATE INVESTMENT STA | 7.77 |
| HANDR REAL ESTATE INVESTMENT TRUST | 7.06 |
| CHOICE PROPERTIES REAL ESTATE INVE | 5.97 |
| FIRST CAPITAL REALTY REAL ESTATE I | 5.88 |
| SMARTCENTRES RL ESTATE INVESTMENT | 5.73 |
| SUMMIT INDUSTRIAL INCOME REIT UNIT | 4.01 |
| DREAM INDUSTRIAL REAL ESTATE INVES | 3.61 |
Sector allocation
| Type | Fund |
|---|---|
| Retail REIT’s | 32.24 |
| Residential REIT’s | 24.26 |
| Industrial REIT’s | 18.27 |
| Diversified REIT’s | 11.64 |
| Office REIT’s | 10.18 |
| Health Care REIT’s | 3.26 |
| Cash and/or Derivatives | 0.16 |
Disclaimer
The data on this website is for your information only. It does not constitute investment advice, or advice on tax or legal matters. Any information provided on this website does not constitute investment advice or investment recommendation nor does it constitute an offer to buy or sell or a solicitation of an offer to buy or sell shares or units in any of the investment funds or other financial instruments described on this website. Should you have any doubts about the meaning of the information provided herein, please contact your financial advisor or any other independent professional advisor.