The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Fundamental Income Net Lease Rl Estt ETF to a Morningstar Medalist Rating of Negative.  The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy gets an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a substantial overweight position in yield exposure and liquidity exposure compared with category peers. High yield exposure is attributed to holding high dividend-paying or buyback stocks, and is suitable for income seekers outside of fixed-income. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. To be considered a quality steward, this strategy's parent organization needs to improve factors like insignificant personal investments from portfolio managers and a bench of limited-tenure portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Realty Income Corp

National Retail Properties

STAG Industrial

W. P. Carey

Vici Properties

Gladstone Commercial

Essential Properties Realty Trust Inc

Lexington Realty

Agree Realty

Getty Realty

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Fundamental Income Net Lease Rl Estt ETF earns an Average Process Pillar rating. The most important driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The size of the portfolio management team also reinforces the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 0%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the performance, before fees and expenses, of the fundamental Income Net Lease Real Estate Index.  The index is generally composed of the U.S.-listed equity securities of companies that derive at least 85% of their earnings or revenues from real estate operations in the net lease real estate sector ("Eligible Companies"). Under normal circumstances, at least 80% of the fund’s net assets, plus borrowings for investment purposes, and will be invested in corporate real estate companies. It is non-diversified. 

 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 23 securities and is about as top-heavy as the category average, with 61.3% of assets in the top 10 holdings.

Average

Process

Exchange Traded Concepts’s team receives a Low People Pillar rating. The most substantial detractor from the rating is the experience of the management team, which averages four years at this fund. The instability of talent across its parent firm also detracts from the team. The firm's asset-weighted manager tenure of four years suggests it could do more to retain portfolio managers. The parent firm's five-year success ratio of 0% further limits the team. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

People

Exchange Traded Concepts lags peer asset managers in a number of stewardship qualities, resulting in a Below Average Parent Pillar rating. Portfolio managers at Exchange Traded Concepts tend not to invest alongside their shareholders, detracting from the overall stewardship assessment. None of the firm’s assets are covered by an invested manager. A notable weakness of Exchange Traded Concepts is the inexperience of its longest-tenured managers compared with other asset managers. Managing capital through a full market cycle is a challenging prospect for seasoned managers, but with only four years of average asset-weighted tenure, there's cause for concern. The firm charges fees on its open-end and exchange-traded funds that are on par with category peers. On average, fund fees on its products fall in the middle quintile, giving it neither an advantage nor disadvantage compared with the competition.

Below Average

Parent

NETLease Corporate Real Estate ETF

NETL tracks an index that provides current income by investing in net lease US real estate equities weighted by a modified market-cap strategy.

Alexandria Real Estate Equities

JPMorgan BetaBuilders MSCI US REIT ETF

Principal Real Estate Active Opportunities ETF

Columbia Research Enhanced Real Estate ETF

CareTrust REIT

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

Home Appreciation US REIT 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

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

WisdomTree US Quality Dividend Growth Fund

iShares Core High Dividend ETF

Siren DIVCON Leaders Dividend ETF

Global X S&P 500 Quality Dividend ETF

Schwab US Dividend Equity ETF

First Trust NASDAQ Technology Dividend Index Fund

Vanguard Dividend Appreciation ETF

Vanguard Real Estate ETF

Vanguard Utilities ETF

Vanguard Total Stock Market ETF

Vanguard FTSE Emerging Markets ETF

Vanguard Total International Stock ETF

Vanguard High Dividend Yield ETF

Vanguard International High Dividend Yield ETF

Dividend growth investing allows for versatility in portfolio construction and strategies. Tax considerations, such as the difference between taxable accounts and IRAs, add complexity to investing decisions. I discuss my approach to dividend investing in my Roth IRA and taxable accounts, emphasizing long-term dividend growth in one and maximizing current and future income in the other.

How I Construct My Dividend Growth-Focused Roth IRA Portfolio

PHOENIX--(BUSINESS WIRE)-- #Dividend--Fundamental Income's Net Lease Corporate Real Estate ETF will increase the fixed monthly dividend to $0.10, a 5.26% increase from its current level.

Fundamental Income Increases Monthly Cash Dividend for the Net Lease Corporate Real Estate ETF by 5.26%

Bank of America

Citigroup

CorEnergy Infrastructure Trust

Goldman Sachs

JPMorgan Chase & Co

Morgan Stanley

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

Boston Properties

Global Net Lease

Public Storage

Simon Property Group

I am very bullish on REITs. Not all of them! There are quite a few that I expect to do poorly. Here are three REITs to sell. Tax your tax loss and move on.

3 REITs To Sell Before 2024

Xtrackers International Real Estate ETF

Real estate headlines seem to only focus on bad news right now, from remote work's impact on offices to struggles for city center retail. That isn't the whole story, however.

Real Estate: The Underrated Alts Segment

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

Hoya Capital Housing ETF

iShares U.S. Home Construction ETF

VanEck Mortgage REIT Income ETF

Direxion Daily Homebuilders & Supplies Bull 3X Shares

Invesco Dynamic Building & Construction ETF

iShares Global REIT ETF

iShares Mortgage Real Estate ETF

iShares Residential Real Estate ETF

IQ US Real Estate Small Cap ETF

Invesco S&P 500 Equal Weight Real Estate ETF

SPDR Dow Jones REIT ETF

Schwab U.S. REIT ETF

Global X SuperDividend REIT ETF

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

iShares Core U.S. REIT ETF

SPDR S&P Homebuilders ETF

Real Estate Select Sector SPDR Fund

Alpine Global Premier Properties Fund

DoubleLine Commercial Real Estate ETF

First Trust Alerian Disruptive

iShares International Developed Real Estate ETF

CBRE Global Real Estate Income Fund

Invesco Real Assets ESG ETF

ALPS Active REIT ETF

SPDR Dow Jones Global Real Estate ETF

SPDR Dow Jones International Real Estate ETF

Vanguard Global ex-U.S. Real Estate ETF

iShares International Developed Property ETF

The history of construction spending since 1993 reveals that this data tends to weaken prior to recessions. For a recent dip in Residential Construction attributed to the rise in mortgage rates, this indicator is charging higher.

Construction Spending Rises

Industrial Logistics Properties

Power REIT

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

InnSuites Hospitality Trust

Strategic Residential & Apartment 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

Four Corners Property Trust

NETSTREIT Corp

REITs have experienced a selloff, creating attractive valuations and high dividend yields in the net lease REIT sector. The key to unlocking value in REITs is selecting stocks that demonstrate growth potential. Net lease REITs with the most favorable cost of capital include Agree Realty, Four Corners Property Trust, Realty Income, NETSTREIT, Essential Properties Realty Trust, and VICI Properties.

Epic REIT Rally 3.0 (The Most Important Thing)

Net lease REITs transfer landlord costs to tenants, making cash flow forecasting more predictable. The Fundamental Income Net Lease Real Estate ETF focuses on net lease REITs for diversification. The top five positions in NETL include STAG Industrial, VICI Properties, Realty Income, W. P. Carey, and National Retail Properties.

NETL: Avoid The 3 Ts With This SWAN Basket

CVS Health

Kohl's

Walgreens

Net lease REITs have historically been solid performers. Elevated interest rates create some headwinds. So does an elevated likelihood of investment grade tenant credit migration.

Net Lease REITs In A New Era

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

Inflation is rapidly cooling off. This has major implications for investors. We explain what we are buying and why.

3 Reasons Inflation Will Continue To Fall: What To Buy

The Fundamental Income Net Lease Real Estate ETF is a concentrated fund of real estate investment trusts (REITs) owning net leased properties, which have underperformed in the current macroeconomic environment of rising interest rates and high inflation. Despite the underperformance, I remain confident in net lease REITs' ability to grow their portfolios, cash flows, and dividends and survive recessions relatively unscathed. NETL offers an attractive 30-day SEC yield of 5.7% and has historically generated dividend growth in the mid-single-digit range, making it a good investment for long-term dividend growth investors.

NETL: The Net Lease REIT Bear Market Continues

ProShares Short Real Estate

Virtus Real Asset Income ETF

U.S. equity markets climbed to their highs of the year as investors took positions ahead of a critical slate of inflation data and an anticipated "pause" in the Fed's rate hike cycle.

Fed Looms Over New 'Bull Market'

Wall Street experts differ in their outlooks for America's housing market.  Wharton professor Jeremy Siegel, real estate tycoon Jeff Greene, and others have warned that home prices will drop, while others like "Shark Tank" star Barbara Corcoran are more optimistic.

Wall Street is divided on the outlook for US house prices. Here's what 6 experts have recently said.

PHOENIX--(BUSINESS WIRE)--Fundamental Income, a Phoenix-based ETF provider and private real estate platform, announced its Net Lease Real Estate ETF (NYSE: NETL) was awarded a 5-star overall rating from Morningstar based on risk-adjusted returns of 233 Real Estate funds as of 3/31/23. NETL ranked 7th among 233 funds for the 3-year period and 7th among 257 funds for the 1-year period in the Real Estate category as of 3/31/23. “We are pleased to see the net lease real estate sector produce strong.

Fundamental Income's Net Lease Real Estate ETF (NETL) Earns 5-Star Overall Rating from Morningstar

Ashford Hospitality Trust

ETFB Green SRI REITs ETF

iStar Inc

SL Green Realty

WisdomTree New Economy Real Es

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

Brookfield Asset Management

Blackstone Group

Enterprise Products Partners

Energy Transfer LP Unit

Blue Owl Capital

Invesco QQQ

SPDR S&P 500 ETF Trust

Spirit Realty Capital

Vanguard S&P 500 ETF

Rental property investing has been a very popular method for building up a passive income stream in the past. Moving forward, however, we believe that high-yield stocks will generate total returns and deliver risk-adjusted passive income that will pummel offered by rentals.

Passive Income In 2023: Why High Yield Stocks Will Pummel Rentals

Playing mega-trends in non-obvious, second-order effect ways can help capture more inefficient opportunities in the markets. NETL is on my watchlist for this reason. Rising e-commerce sales are a mega-trend tailwind.

NETL: Play The E-Commerce Boom Via Real Estate

News for NETLease Corporate Real Estate ETF ETF (NETL)