Armada debuts residential REIT ETF

Mar 8th, 2022 | By | Category: Alternatives / Multi-Asset

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Armada ETF Advisors, a newly formed ETF issuer focused on the real estate market, has launched its debut product.

Armada debuts residential REIT ETF

The ETF provides pure-play exposure to REITs that own and manage residential properties.

The Home Appreciation US REIT ETF (HAUS US) provides actively managed, pure-play exposure to real estate investment trusts (REITs) that derive the majority of their revenue from residential properties.

The fund has been listed on NYSE Arca with an expense ratio of 0.60%.

According to Armada, the US is experiencing a sustained, structural housing shortage aggravated in recent years by a lack of building, creating short and long-term investment opportunities in residential housing.

To capture these opportunities, the ETF invests in REITs listed either in the US or Canada that generate at least 75% of their revenue from the ownership and management of multifamily housing, manufactured housing, single-family rental housing, or senior housing.

Eligible constituents must have a minimum market capitalization of $100 million and an average daily trading volume greater than $1m.

Armada utilizes the expertise of a high-profile, sector-specific advisory board with experience across the residential housing market to help identify early trends, regional strengths, and changes in the residential cycle.

When selecting individual securities, Armada considers a REIT’s financial performance and stability; economic factors such as interest rates, rents, inflation, and economic growth; and market developments that may affect the availability of loan or equity financing.

Armada expects the fund to hold approximately 25 REITs under normal market conditions. The ETF employs a flexible weighting strategy up to a maximum weight of 10% per constituent.

David Auerbach, Managing Director of Armada ETF Advisors, said: “Real estate touches every investor, from young to old. With inflation near record highs, a real estate allocation provides diversification to a traditional stock/bond portfolio. Through its underlying REIT investments, HAUS offers investors potential additional income benefits, including quarterly dividend payouts and potential appreciation.”

Justin Goldberg, CEO of Armada ETF Advisors, added: “Real estate is personal. Having a roof over your head is something every person thinks and worries about. While homeownership or the ability to invest in individual properties may be out of reach for many, our goal is to provide access to real estate through the flexible ETF wrapper.”

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