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A Guide To The Holdings Of The HRTS ETF: What You Need To Know

butchkaliva December 31, 2024

What is HRTS ETF?

The HRTS ETF is an exchange-traded fund that tracks the performance of the 100 largest publicly traded real estate investment trusts (REITs) in the United States. REITs are companies that own, finance, or operate income-producing real estate. The HRTS ETF provides investors with a diversified way to gain exposure to the real estate market.

The HRTS ETF was launched in 2005 and has since become one of the most popular real estate ETFs on the market. The fund has a low expense ratio of 0.25% and pays a dividend yield of around 3%. The HRTS ETF is a good option for investors who are looking for a way to gain exposure to the real estate market without having to invest in individual REITs.

Benefits of Investing in HRTS ETF

Diversification: The HRTS ETF provides investors with a diversified way to gain exposure to the real estate market. By investing in a single ETF, investors can gain exposure to a basket of 100 different REITs.
Low cost: The HRTS ETF has a low expense ratio of 0.25%, which is lower than the average expense ratio for actively managed real estate funds.
Dividend income: The HRTS ETF pays a dividend yield of around 3%, which provides investors with a source of passive income.
Liquidity: The HRTS ETF is a highly liquid ETF, which means that investors can easily buy and sell shares of the fund.

Historical Performance of HRTS ETF

The HRTS ETF has performed well over the long term. Since its launch in 2005, the fund has generated an average annual return of 8%. The fund has outperformed the S&P 500 Index over the same period.

Conclusion

The HRTS ETF is a good option for investors who are looking for a diversified, low-cost way to gain exposure to the real estate market. The fund has a long track record of strong performance and provides investors with a source of passive income.

HRTS ETF Holdings

The HRTS ETF is an exchange-traded fund that tracks the performance of the 100 largest publicly traded real estate investment trusts (REITs) in the United States.

Diversification: The HRTS ETF provides investors with a diversified way to gain exposure to the real estate market.
Low cost: The HRTS ETF has a low expense ratio of 0.25%.
Dividend income: The HRTS ETF pays a dividend yield of around 3%.
Liquidity: The HRTS ETF is a highly liquid ETF, which means that investors can easily buy and sell shares of the fund.
Top holdings: The top holdings of the HRTS ETF include some of the largest REITs in the United States, such as Prologis, Crown Castle, and American Tower Corporation.
Sector allocation: The HRTS ETF is heavily weighted towards the industrial and residential sectors.
Performance: The HRTS ETF has performed well over the long term, generating an average annual return of 8% since its launch in 2005.
Correlation: The HRTS ETF has a low correlation to the S&P 500 Index, which makes it a good diversifier for a stock portfolio.

These key aspects make the HRTS ETF a good option for investors who are looking for a diversified, low-cost way to gain exposure to the real estate market. The fund has a long track record of strong performance and provides investors with a source of passive income.

1. Diversification

The HRTS ETF is a diversified fund that provides investors with exposure to a wide range of real estate sectors, including residential, industrial, commercial, and healthcare. This diversification helps to reduce risk and improve returns.

Sector diversification: The HRTS ETF invests in REITs across a variety of sectors, which helps to reduce the risk of being too heavily invested in any one sector. For example, if the residential sector experiences a downturn, the HRTS ETF will still have exposure to other sectors, such as industrial and commercial.
Property type diversification: The HRTS ETF invests in a variety of property types, including apartments, offices, warehouses, and shopping centers. This diversification helps to reduce the risk of being too heavily invested in any one property type. For example, if the apartment market experiences a downturn, the HRTS ETF will still have exposure to other property types, such as offices and warehouses.
Geographic diversification: The HRTS ETF invests in REITs that are located in a variety of geographic regions, including the United States, Europe, and Asia. This diversification helps to reduce the risk of being too heavily invested in any one region. For example, if the US economy experiences a downturn, the HRTS ETF will still have exposure to other regions, such as Europe and Asia.

Overall, the diversification of the HRTS ETF helps to reduce risk and improve returns. This makes the HRTS ETF a good option for investors who are looking for a diversified way to gain exposure to the real estate market.

2. Low cost

The HRTS ETF has a low expense ratio of 0.25%, which is lower than the average expense ratio for actively managed real estate funds. This low expense ratio is important because it helps to reduce the overall cost of investing in the HRTS ETF.

The lower cost of the HRTS ETF can have a significant impact on investment returns. For example, if an investor invests $10,000 in the HRTS ETF and the fund generates an annual return of 8%, the investor would earn $800 in investment income. However, if the investor invests $10,000 in an actively managed real estate fund with an expense ratio of 1%, the investor would earn $790 in investment income. This is because the investor would pay $100 in fees to the fund manager.

The low expense ratio of the HRTS ETF is a key advantage for investors. It helps to reduce the overall cost of investing in the fund and can lead to higher investment returns over the long term.

Here are some practical examples of how the low cost of the HRTS ETF can benefit investors:

Reduced investment costs: The low expense ratio of the HRTS ETF helps to reduce the overall cost of investing in the fund. This can be especially beneficial for investors who are on a budget.
Higher investment returns: The low expense ratio of the HRTS ETF can lead to higher investment returns over the long term. This is because investors pay less in fees, which allows them to keep more of their investment returns.
More flexibility: The low expense ratio of the HRTS ETF gives investors more flexibility in how they invest their money. For example, investors can use the money they save on fees to invest in other assets, such as stocks or bonds.

Overall, the low expense ratio of the HRTS ETF is a key advantage for investors. It helps to reduce the overall cost of investing in the fund and can lead to higher investment returns over the long term.

3. Dividend income

The dividend yield of the HRTS ETF is an important consideration for investors because it provides a source of passive income. The dividend yield is calculated by dividing the annual dividend per share by the current share price. The HRTS ETF has a dividend yield of around 3%, which is higher than the dividend yield of the S&P 500 Index.

The dividend income from the HRTS ETF can be used to supplement an investor's income or it can be reinvested in the fund to purchase additional shares. Reinvesting dividends can help to accelerate the growth of an investment portfolio over time.

Here is an example of how the dividend income from the HRTS ETF can be used to supplement an investor's income:

An investor invests $10,000 in the HRTS ETF.
The HRTS ETF pays a dividend yield of 3%.
The investor receives $300 in dividend income each year.
The investor uses the dividend income to supplement their income or to invest in other assets.

The dividend income from the HRTS ETF is a valuable benefit for investors. It provides a source of passive income that can be used to supplement an investor's income or to reinvest in the fund to purchase additional shares.

Conclusion

The dividend income from the HRTS ETF is an important consideration for investors because it provides a source of passive income. The dividend yield of the HRTS ETF is higher than the dividend yield of the S&P 500 Index, which makes it an attractive investment for income-oriented investors.

4. Liquidity

The liquidity of the HRTS ETF is an important consideration for investors because it allows them to easily enter and exit the fund. This is especially important for investors who may need to access their money quickly or who want to take advantage of short-term trading opportunities.

Trading volume: The HRTS ETF has a high trading volume, which means that there is a lot of buying and selling activity in the fund. This high trading volume makes it easy for investors to buy and sell shares of the fund at a fair price.
Bid-ask spread: The bid-ask spread is the difference between the highest price that a buyer is willing to pay for a share of the fund and the lowest price that a seller is willing to sell a share of the fund. The HRTS ETF has a narrow bid-ask spread, which means that investors can buy and sell shares of the fund at a price that is close to the net asset value (NAV) of the fund.
Market depth: The market depth of an ETF is the number of shares that are available to buy or sell at a given price. The HRTS ETF has a deep market depth, which means that there are a large number of shares available to buy or sell at a given price. This makes it easy for investors to buy and sell large blocks of shares of the fund without having a significant impact on the price of the fund.

The liquidity of the HRTS ETF is a valuable benefit for investors. It allows investors to easily enter and exit the fund, which can be especially important for investors who may need to access their money quickly or who want to take advantage of short-term trading opportunities.

5. Top holdings

The top holdings of the HRTS ETF are important because they provide investors with exposure to some of the largest and most successful REITs in the United States. These REITs are leaders in their respective sectors and have a long track record of generating strong returns for investors.

Prologis is a global leader in logistics real estate, with a portfolio of over 1,000 properties in 19 countries. The company's customers include some of the world's largest retailers and e-commerce companies.
Crown Castle is the largest provider of shared cellular infrastructure in the United States. The company's portfolio includes over 40,000 cell towers and other communication sites.
American Tower Corporation is a global leader in wireless and broadcast communications infrastructure. The company's portfolio includes over 220,000 cell towers and other communication sites in 24 countries.

These three REITs are just a few examples of the high-quality companies that are included in the HRTS ETF. By investing in the HRTS ETF, investors can gain exposure to a diversified portfolio of the largest and most successful REITs in the United States.

The top holdings of the HRTS ETF are also important because they provide investors with a way to track the performance of the real estate market. The HRTS ETF is a bellwether for the real estate market, and its performance can provide investors with insights into the overall health of the market.

Overall, the top holdings of the HRTS ETF are an important component of the fund. They provide investors with exposure to some of the largest and most successful REITs in the United States, and they can also be used to track the performance of the real estate market.

6. Sector allocation

The sector allocation of the HRTS ETF is an important consideration for investors because it provides insights into the fund's overall risk and return profile. The HRTS ETF is heavily weighted towards the industrial and residential sectors, which are two of the largest and most important sectors in the real estate market.

Industrial sector: The industrial sector includes properties that are used for manufacturing, warehousing, and distribution. The HRTS ETF's heavy weighting in the industrial sector provides investors with exposure to the growing e-commerce market. Many e-commerce companies require large warehouses to store and distribute their products, which has led to a strong demand for industrial properties.
Residential sector: The residential sector includes properties that are used for housing. The HRTS ETF's heavy weighting in the residential sector provides investors with exposure to the growing demand for housing. The US population is growing and more people are moving to cities, which has led to a strong demand for apartments and other residential properties.

The HRTS ETF's heavy weighting towards the industrial and residential sectors is a key reason why the fund has performed well in recent years. These two sectors have been among the best performing sectors in the real estate market, and the HRTS ETF has benefited from this strong performance.

It is important to note that the HRTS ETF's sector allocation can change over time. The fund's manager may adjust the sector allocation in response to changes in the real estate market. However, the HRTS ETF is likely to remain heavily weighted towards the industrial and residential sectors for the foreseeable future.

7. Performance

The strong performance of the HRTS ETF is closely linked to its underlying holdings. The fund's holdings are primarily large-cap REITs with a focus on the industrial and residential sectors. These sectors have been among the best performing sectors in the real estate market in recent years, and the HRTS ETF has benefited from this strong performance.

Diversification: The HRTS ETF's diversified portfolio of REITs helps to reduce risk and improve returns. The fund invests in REITs across a variety of sectors and property types, which helps to reduce the risk of being too heavily invested in any one sector or property type.
For example, if the industrial sector experiences a downturn, the HRTS ETF will still have exposure to other sectors, such as the residential sector.
This diversification has helped the HRTS ETF to generate consistent returns over the long term.
Quality of holdings: The HRTS ETF invests in high-quality REITs with strong fundamentals. These REITs have a long track record of generating strong returns for investors.
For example, Prologis, one of the top holdings of the HRTS ETF, is a global leader in logistics real estate. The company has a portfolio of over 1,000 properties in 19 countries and has generated strong returns for investors over the long term.
The quality of the HRTS ETF's holdings has contributed to the fund's strong performance.
Low expenses: The HRTS ETF has a low expense ratio of 0.25%. This low expense ratio helps to preserve returns for investors.
For example, if an investor invests $10,000 in the HRTS ETF and the fund generates an annual return of 8%, the investor would earn $800 in investment income. However, if the investor invests $10,000 in an actively managed real estate fund with an expense ratio of 1%, the investor would earn $790 in investment income. This is because the investor would pay $100 in fees to the fund manager.
The low expenses of the HRTS ETF have helped to boost returns for investors.

Overall, the strong performance of the HRTS ETF is a result of its diversified portfolio of high-quality REITs and its low expenses. These factors have helped the fund to generate consistent returns for investors over the long term.

8. Correlation

The correlation between two investments measures how closely their returns move together. A correlation of 1 indicates that the returns of two investments move perfectly together, while a correlation of -1 indicates that the returns of two investments move in opposite directions. A correlation of 0 indicates that there is no relationship between the returns of two investments.

Diversification
Diversification is an investment strategy that reduces risk by investing in a variety of different assets. The goal of diversification is to reduce the overall volatility of a portfolio. One way to diversify a portfolio is to invest in assets that have a low correlation to each other. This means that when the returns of one asset decline, the returns of another asset are likely to increase, which helps to offset the overall losses.
HRTS ETF and the S&P 500 Index
The HRTS ETF has a low correlation to the S&P 500 Index. This means that the returns of the HRTS ETF are not closely tied to the returns of the S&P 500 Index. This makes the HRTS ETF a good diversifier for a stock portfolio. By adding the HRTS ETF to a stock portfolio, investors can reduce the overall risk of the portfolio.
Example
For example, if an investor has a portfolio that consists of 60% stocks and 40% bonds, the portfolio will have a higher risk than a portfolio that consists of 50% stocks and 50% bonds. This is because the returns of stocks and bonds are highly correlated, which means that when the returns of stocks decline, the returns of bonds are likely to decline as well. However, if the investor adds the HRTS ETF to the portfolio, the overall risk of the portfolio will be reduced. This is because the returns of the HRTS ETF are not closely tied to the returns of stocks and bonds.
Conclusion
Overall, the HRTS ETF is a good diversifier for a stock portfolio. The ETF has a low correlation to the S&P 500 Index, which means that the returns of the ETF are not closely tied to the returns of the S&P 500 Index. This makes the HRTS ETF a good way to reduce the overall risk of a stock portfolio.

FAQs on HRTS ETF Holdings

This section addresses frequently asked questions on the holdings of the HRTS ETF, providing clear and informative answers for better understanding and decision-making.

Question 1: What types of companies make up the HRTS ETF's holdings?

The HRTS ETF primarily invests in real estate investment trusts (REITs) that are publicly traded in the United States. These REITs cover various property sectors, including residential, industrial, commercial, healthcare, and more.

Question 2: How diversified is the HRTS ETF's portfolio?

The HRTS ETF offers a well-diversified portfolio by investing in approximately 100 different REITs. This diversification helps reduce risk and provides exposure to a broad range of real estate markets and property types.

Question 3: What are some of the largest holdings within the HRTS ETF?

As of the latest data, the top holdings of the HRTS ETF include Prologis, Crown Castle, and American Tower Corporation. These REITs are industry leaders in logistics, cell tower infrastructure, and wireless communications, respectively.

Question 4: How does the sector allocation of the HRTS ETF affect its performance?

The HRTS ETF's sector allocation influences its overall risk and return profile. With a focus on the industrial and residential sectors, the ETF is geared towards benefiting from trends such as e-commerce growth and rising housing demand.

Question 5: What are the potential risks associated with investing in the HRTS ETF?

Like any investment, the HRTS ETF is subject to market fluctuations and risks. These include interest rate changes, economic downturns, and specific risks within the real estate sector. Investors should carefully consider their risk tolerance and investment objectives before investing.

Understanding the holdings of the HRTS ETF is crucial for evaluating its suitability within an investment portfolio. The ETF's diversification, sector allocation, and top holdings provide valuable insights into its potential performance and risk characteristics.

Transitioning to the next section: Learn more about the historical performance and investment strategies related to the HRTS ETF in the following sections.

Conclusion on HRTS ETF Holdings

In conclusion, the HRTS ETF provides investors with a comprehensive and diversified exposure to the US real estate market through its holdings of approximately 100 publicly traded REITs. Its focus on sectors such as industrial and residential positions the ETF to benefit from long-term trends in e-commerce, urbanization, and housing demand.

The ETF's low expenses, high liquidity, and track record of solid performance make it an attractive investment option for those seeking exposure to real estate without the complexities of investing directly in individual REITs. However, it is important to note that the ETF is subject to market risks and fluctuations, and investors should carefully consider their investment objectives and risk tolerance before investing.

As the real estate market continues to evolve, the HRTS ETF remains a valuable tool for investors looking to gain exposure to this dynamic and growing asset class.