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(Seoul=Yonhap Infomax) Yo Been Noh—Funds are flowing into real estate investment trust (REIT) exchange-traded funds (ETFs) as investors grow wary of the recent surge in dividend stock prices.
According to Mirae Asset Global Investments on the 21st, the net asset value of the 'TIGER REITs Real Estate Infrastructure ETF' reached 1.0313 trillion won ($845 million) at the previous day's close, making it the largest among domestically listed REIT ETFs.
Launched in July 2019 as South Korea's first REIT ETF, the fund invests in assets such as Macquarie Infrastructure (15.7%), SK REITs (12.3%), KB Balhae Infrastructure (10.3%), Lotte REITs (9.6%), and ESR Kendall Square REITs (9.2%).
The recent rally in domestic dividend stocks has heightened interest in relatively undervalued REIT assets. The ETF's stable monthly dividends and low effective cost have also attracted investors.
The fund distributes monthly payouts based on dividends from its underlying REIT and infrastructure holdings. Taking into account expected dividends and remaining distributable reserves, it pays a uniform monthly dividend of 33 won per share, resulting in a distribution yield of approximately 7.6% over the past 12 months.
According to the Korea Financial Investment Association, as of the end of October, the effective cost for the TIGER REITs Real Estate Infrastructure ETF stood at 0.1587%, the lowest among competing products. As a fund-of-funds product, long-term investors should note that effective costs can impact returns.
Year-to-date, the ETF has delivered a return of 17.2%, the highest among domestic REIT ETFs.
Byung Ho Yoon, Head of Strategic ETF Management at Mirae Asset Global Investments, said, "Amid strong interest from dividend-focused investors, this ETF has posted the best returns among domestic REIT ETFs. We will continue to strengthen transparent management of distributable reserves and enhance portfolio performance to solidify our role as the representative ETF in Korea's REIT market."
ybnoh@yna.co.kr
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