First Trust rolls out actively managed prime real estate ETF

Nov 17th, 2015 | By | Category: Alternatives / Multi-Asset

First Trust Advisors, a leading provider of exchange-traded funds, has launched an actively managed ETF which aims to provide investors with targeted exposure to US and international real estate securities.

First Trust rolls out actively managed real estate ETF

First Trust’s new actively managed ETF invests in top tier, prime properties in the world’s dominant cities.

The First Trust Heitman Global Prime Real Estate ETF (NYSE Arca: PRME) will invest in the shares of publicly-traded companies that own top tier, prime properties in the world’s dominant cities.

“This ETF provides a unique tool for investors to gain exposure to an actively managed portfolio of some of the most attractive prime real estate assets around the world, in a way that’s both diversified and liquid,” said Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded Fund Strategist at First Trust.

According to First Trust, prime real estate assets are, by nature, few and in high demand. Historically, constructing a well-diversified portfolio of private prime real estate assets has been difficult to accomplish; however, research has shown that a concentration of investments in prime markets, and prime assets in targeted “gateway” cities, is obtainable in the publically-listed market.

First Trust believes a portfolio of select public real estate companies has the potential to act as a proxy for direct prime real estate investments while seeking to provide high risk-adjusted returns.

Heitman Real Estate Securities will manage the fund’s portfolio, combining top-down and bottom-up analysis in order to identify real estate securities which they believe provide the greatest potential for capturing the benefits of long-term real estate investing.

“As investors in the real estate space for almost 50 years, we know first-hand the benefits of investing in prime real estate and prime markets around the world. While we believe owning prime real estate makes sense through all market cycles, we see now as a particularly good time to invest, as real estate investment trusts (“REITs”) are trading at discounts to their underlying real estate value,” said Kathy Sandstrom, Senior Managing Director of Heitman’s Public Real Estate Securities business.

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