Weakness in Residential REIT ETF's Process and People Pillar ratings limits this strategy to a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an underweight in momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. The longest-tenured manager has a wealth of experience, but other weaknesses limit it to a Below Average People Pillar rating. The strategy's parent organization is industry standard, albeit with some strong attributes like overall affordable fees, but is held back by discontinuity among portfolio managers. This earns the firm an Average Parent Pillar rating.

Analyst Rating

Tricon Residential

Centerspace REIT

Apartment Income REIT Corp

CareTrust REIT

Independence Realty Trust

Elme Communities

Welltower

Apartment Investment and Management

Equity Residential

UMH Properties

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Residential REIT ETF earns a Below Average Process Pillar rating. 

The process benefits from its relatively concentrated portfolio, with its top 10 holdings accounting for 44% of assets. High-conviction picks court the risk of blowing up, but can also drive outperformance. However, the rating is limited by the parent firm's five-year retention rate of 60%, which suggests it could do more to hold onto its portfolio managers. Being an actively managed strategy also detracts from the process. Historical data, like Morningstar's Active/Passive Barometer, shows that actively managed funds have generally underperformed their passive counterparts, especially over longer time horizons.

 This strategy prefers smaller market-cap firms compared with the average fund in its peer group, the Real Estate Morningstar Category.  But in terms of style (value/growth) exposure, it does not have much of a bias and resembles the category's typical portfolio. Examining additional factor exposure, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also taken a contrarian approach with lower exposure to momentum stocks over peers in recent years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. Additionally, this strategy has exhibited a tilt toward low-volatility stocks in these years, meaning companies with a lower historical standard deviation of returns over its peers. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. In recent months, the strategy also had less Volatility factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in real estate by 2.6 percentage points in terms of assets compared with the category average, and its healthcare allocation is similar to the category. The sectors with low exposure compared to category peers are consumer cyclical and financial services; however, the allocations are similar to the category. The strategy owns 26 securities and is less top-heavy than peers. Specifically, 44.0% of the strategy's assets are concentrated within the top 10 fund holdings, compared to the category’s 59.9% average.

Below Average

Process

Residential REIT ETF earns a Below Average People Pillar rating. The team benefits from the strategy's fees, which rank in its category's least expensive quintile. A higher expense ratio reduces net returns, so low costs give this team an advantage. However, the rating is held back by the combined average five-year excess return of each manager, which shows that the funds they manage have underperformed their respective category average. The turnover of its management team also holds the rating back. The fund last saw a manager change two years ago.


The team is backed by Alfred C. Otero, the longest-tenured manager on the strategy, who brings 22 years of listed portfolio management experience.  Alfred C. Otero has an experienced backdrop of support. The three listed managers boast 15 years of average listed portfolio management experience.

People

Even though Armada only has a two-year track record, it has shown to be an industry-standard steward, warranting an Average Parent Pillar rating. Armada currently manages two vehicles, with a total of $5.4 million under management and a roster of three portfolio managers. The team has brought on a few, mostly veteran managers averaging about 15 years of total industry experience.  

 The below-average fees of Armada's open-end and exchange-traded funds display a commitment to maximizing investor returns. The average net expense ratio for its funds ranks within the cheapest quintile of peer asset managers.  

 To retain an Average rating, Armada will be expected to uphold a consistent track record of positive investor experience.

Average

Parent

Home Appreciation US REIT ETF

HAUS provides exposure to publicly traded REITS that derive a substantial amount of their revenue from US residential properties. The fund is actively managed.

Alexandria Real Estate Equities

JPMorgan BetaBuilders MSCI US REIT ETF

Principal Real Estate Active Opportunities ETF

Columbia Research Enhanced Real Estate ETF

Dimensional US Real Estate ETF

Dimensional Global Real Estate ETF

iShares Environmentally Aware Real Estate ETF

Fidelity MSCI Real Estate ETF

First Trust S&P REIT Index Fund

Franklin Street Properties Corp.

Generation Income Properties

Goldman Sachs Future Real Estate And Infrastructure Equity ETF

Hudson Pacific Properties

iShares Cohen & Steers REIT ETF

Pacer Benchmark Industrial Real Estate SCTR ETF

InvenTrust Properties Corp

iShares U.S. Real Estate ETF

JPMorgan Realty Income ETF

Janus Henderson U.S. Real Estate ETF

Invesco KBW Premium Yield Equity REIT ETF

NETLease Corporate Real Estate ETF

Nuveen Short-Term REIT ETF

OUTFRONT Media

REITs bounced back from a rough start to the year with a strong +3.26% average total return in March. Mid cap (+5.04%), small cap (+3.90%) and large cap REITs (+2.32%) averaged gains in March, while micro caps (-0.32%) saw yet another month in the red. 78.06% of REIT securities had a positive total return in March.

The State Of REITs: April 2024 Edition

American Homes 4 Rent

Brandywine Realty

Chatham Lodging Trust

Healthpeak Properties Inc

EPR Properties

Iron Mountain

Medical Properties Trust

REITs fell slightly deeper into the red in 2024 with a -0.81% total return in February. Mid cap (+1.46%) and large cap REITs (+1.04%) averaged gains in February outperforming small caps (-1.33%) and micro caps (-6.98%). Only 50.64% of REIT securities had a positive total return in February.

The State Of REITs: March 2024 Edition

Bank of America

Citigroup

CorEnergy Infrastructure Trust

Goldman Sachs

JPMorgan Chase & Co

Morgan Stanley

Realty Income Corp

Office Properties Income Trust

The REIT sector had a rough start to 2024 with a -5.72% total return in January. Large cap REITs (-4.79%) outperformed their smaller peers in January. Micro cap REITs (-8.39%) averaged the steepest declines. Only 9.55% of REIT securities had a positive total return in January.

The State Of REITs: February 2024 Edition

American Tower

Diversified Healthcare Trust

Empire State Realty Trust

Kimco Realty

US Diversified Real Estate ETF

Pennsylvania Real Estate Investment Trust

Invesco Active US Real Estate

The REIT sector closed the year out strong with a +11.40% total return in December, pushing into positive territory for the full year (+8.66%). Small cap REITs (+13.39%) outperformed in December. Large cap REITs (+9.55%) averaged a lower return than their smaller peers. 90.79% of REIT securities had a positive total return in December with 66.25% in the black for the full year.

The State Of REITs: January 2024 Edition

Equinix

Extra Space Storage

NexPoint Residential Trust

REITs averaged a -5.31% total return in October and have now fallen to a double-digit negative total return year to date (-10.46%). Large cap REITs (-2.24%) outperformed their smaller peers in October. Micro caps (-11.32%) extended their streak of severe underperformance. 26.80% of REIT securities had a positive total return in October with just 25.00% in the black year to date.

The State Of REITs: November 2023 Edition

Global Net Lease

Industrial Logistics Properties

Power REIT

ALPS Active REIT ETF

REITs averaged a -7.14% total return in September and have fallen into the red year to date. Small cap REITs (-6.51%) outperformed yet again in September. Micro caps (-10.45%) continue to severely underperform their larger REIT peers. Only 9.74% of REIT securities had a positive total return in September with 34.38% in the black year to date.

The State Of REITs: October 2023 Edition

Americold Realty

Digital Realty Trust

First Industrial Realty Trust

Hersha Hospitality Trust Class A

The REIT sector gave up some of the gains achieved in June and July, with a -4.13% average total return in August. Small cap REITs (-2.49%) outperformed again in August. Micro caps (-13.08%) badly underperformed their larger REIT peers. Only 18.06% of REIT securities had a positive total return in August, with 48.13% in the black year to date.

The State Of REITs: September 2023 Edition

ProShares Bitcoin Strategy ETF

US Treasury 3 Month Bill Etf

On this episode of ETF Prime, host Nate Geraci speaks with a trio of individuals discussing several different topics. His guests include VettaFi's Todd Rosenbluth who discusses bitcoin ETFs, F/m Investments mutual fund share class filing, and more.

ETF Prime: Rosenbluth on Bitcoin ETFs, Plus Best Practices and the PRVT ETF

InnSuites Hospitality Trust

Strategic Residential & Apartment Real Estate ETF

iShares Residential Real Estate ETF

Hoya Capital High Dividend Yield ETF

The REIT sector followed a strong June with further gains in July, averaging a solid +4.37% total return in July. Small-cap REITs (+5.23%) continued to outperform in July. Large caps (+2.46%) underperformed their smaller REIT peers for the 3rd straight month in July. 73.72% of REIT securities had a positive total return in July with 60.63% in the black year to date.

The State Of REITs: August 2023 Edition

Farmland Partners

Host Hotels & Resorts

Gladstone Land

PotlatchDeltic

After 4 straight months in the red, the REIT sector surged back into the black year to date with a stellar +7.41% total return in June. Small cap REITs (+8.59%) outperformed again in June. Large caps (+5.51%) again underperformed their smaller REIT peers in June. A remarkable 87.34% of REIT securities had a positive total return in June with 49.69% in the black year to date.

The State Of REITs: July 2023 Edition

AvalonBay Communities

SPDR S&P 500 ETF Trust

Housing supply constraints and high borrowing costs are pricing many potential buyers out of the single-family market, leading to increased demand for rental properties. Apartment REITs, particularly those exposed to growing markets, are well-positioned to benefit from this supply-demand imbalance and pass value along to investors. Investors can gain exposure to this opportunity through individual apartment REITs or ETFs focused on residential real estate, such as the Residential REIT ETF.

Apartment REITs: Gain From Housing Market Imbalances

The Residential REIT Income ETF (HAUS) is an actively managed ETF focused on the residential housing market's various sectors. This ETF is just over one year old. HAUS actively shifts its holdings between other Residential REITs which cover the various sectors of that REIT's universe.

HAUS: A New Residential REIT ETF To Consider

Ashford Hospitality Trust

Invesco S&P 500 Equal Weight Real Estate ETF

ETFB Green SRI REITs ETF

IQ US Real Estate Small Cap ETF

SPDR Dow Jones REIT ETF

iStar Inc

Schwab U.S. REIT ETF

SL Green Realty

Global X SuperDividend REIT ETF

Pacer Funds Trust-Pacer Benchmark Data & Infrastructure Real Estate Sector ETF

iShares Core U.S. REIT ETF

Vanguard Real Estate ETF

Virtus Real Asset Income ETF

WisdomTree New Economy Real Es

Real Estate Select Sector SPDR Fund

The REIT sector fell again in March with a -6.11% total return. Large cap (-1.99%) and mid cap (-4.56%) REITs saw modestly negative total returns in March, while small caps (-6.76%) and micro caps (-15.50%) were deeper in the red.

The State Of REITs: April 2023 Edition

Alpine Global Premier Properties Fund

Cambria Global Real Estate ETF

CubeSmart

FlexShares Global Quality Real Estate Index Fund

Xtrackers International Real Estate ETF

Hoya Capital Housing ETF

iShares International Developed Real Estate ETF

CBRE Global Real Estate Income Fund

iShares U.S. Home Construction ETF

Nuveen Real Estate Income Fund

Life Storage

VanEck Mortgage REIT Income ETF

Direxion Daily Homebuilders & Supplies Bull 3X Shares

Neuberger Berman Real Estate Securities Income Fund Inc

National Storage Affiliates Trust

InfraCap REIT Preferred ETF

Storage REITs are the best-performing property sector this year after lagging in late 2022, lifted by surprisingly solid earnings results and a thawing of the previously icy-cold housing market. Storage demand is driven largely by housing activity – specifically, home sales and rental market turnover - and the recent moderation in mortgage rates has eased concern of a deepening housing recession.

Storage Wars

Avantis Real Estate ETF

Boston Properties

Cousins Properties

Direxion Daily Real Estate Bull 3x Shares

Direxion Daily Real Estate Bear 3x Shares

ETRACS Monthly Pay 1.5X Leveraged Mortgage REIT ETN

Paramount Group

iShares Global REIT ETF

The REIT sector gave up most of January's big gains in February with a -6.18% total return. Small cap (-7.42%) and mid cap (-6.05%) REITs fell the furthest in February, with micro caps (-5.15%) and large caps (-4.74%) seeing smaller declines.

The State Of REITs: March 2023 Edition

Equity LifeStyle Properties

Essex Property Trust

Mid-America Apartment Communities

Sun Communities

The recent collapse of Silicon Valley Bank and the launch of the Federal Reserve's Bank Term Funding Program (“BTFP”) have sent markets on a roller-coaster ride. Recent housing data continues to show signs of home prices moving lower, and sequential asking rents in several major apartment markets has been moving lower as well.

Residential REITs: Stability In An Unstable World

The manufactured housing sector has an impressive history of managing well through difficult economic and financial periods by providing a truly affordable housing proposition to an underserved market. The industry does not push rents as aggressively as more traditional rental housing operators during really strong periods such as 2021-22 but have been successful at raising rents.

Manufactured Housing: Predictable Top Line, But Operating Expenses Reset

Global X Artificial Intelligence & Technology ETF

Roundhill Ball Metaverse ETF

Wisdomtree Artificial Intelligence And Innovation Fund

Additional filings cover nontraded REITs and Israeli bonds.

New Filings Include Pure Play AI ETF

NEW YORK--(BUSINESS WIRE)--Armada ETF Advisors, a REIT-specialized asset manager, and Arialgo Ltd, a REIT-specialized Machine Learning data analytics company, jointly announce plans to merge companies to deliver leading technology-driven solutions to REIT investors. Phil Bak from the Armada team will serve as CEO of the joint entity. Arialgo's Roni Appel and Assaf Zeevi will serve as COO and CSO, respectively. REIT industry veterans Al Otero and David Auerbach will serve as Managing Directors.

Armada ETF Advisors and Arialgo Ltd Announce Merger Plans, Establishing Technology-Guided REIT Asset Manager

BRT Apartments

Blackstone Group

Clipper Realty

Camden Property

Invitation Homes

Apartment REITs were the second-worst-performing property sector in 2022 - barely outperforming the troubled office sector - despite delivering a record year of operating performance highlighted by 20% FFO growth. Following two years of historic rent growth, there is little doubt that growth will moderate over the coming quarters. Market consensus sees a "hard landing" with rising vacancies and declining rents.

Apartment REITs: Tracking For Soft Landing

Acadia Realty Trust

Bed Bath & Beyond

New York City REIT Inc

Sotherly Hotels

Global X Data Center REITs & Digital Infrastructure ETF

The REIT sector sharply rebounded from a tough 2022 with an +11.77% total return in January 2023. Micro cap REITs (+16.16%) saw disproportionately strong gains in January, followed by double-digit returns for small caps (+11.79%), mid caps (+11.50%) and large caps (+10.07%).

The State Of REITs: February 2023 Edition

The major coastal apartment operators have reported fourth quarter 2022 earnings and provided conservative yet better-than-feared forward guidance for the coming year. These results provide an attractive backdrop for a total return performance in the coming quarters.

Coastal Apartments: Better Than Feared As Trends Stabilize

Sunbelt apartment companies Mid-America (MAA) and Camden Property Trust (CPT) each reported fourth quarter 2022 earnings late last week. MAA reported a modest “beat” to 4Q earnings and initiated FFO guidance for 2023, which implies a solid 7% growth in funds from operations (FFO).

Sunbelt Region Apartments: Bellwethers Provide Insights Into 2023

Despite delivering the strongest earnings growth of any property sector in 2022, Self-Storage REITs have stumbled of late amid a post-pandemic demand normalization and pressure from elevated supply growth. Storage demand is driven largely by housing activity – specifically home sales and rental market turnover. Rental market turnover finished 2022 near historic-lows while home sales also dipped to decade-lows.

Storage REITs: Downsized Demand

The non-traded REIT industry has made news in recent years due to the large sums of retail investor capital which has poured into the space. Investors have several ways of owning publicly traded REITs.

Traded Vs. Non-Traded REITs

News for Home Appreciation US REIT ETF ETF (HAUS)