Ok so in the case of this UBS fund the NAV is an estimation the market value of the real estate portfolio of this fund? (or in this case of all the underlying funds?) And in order to buy a piece of this fund you need to pay 30% more than the actual face value of the underlying assets?
Considering the inflated valuation of Real Estate right now, plus you add 30% to that… The expected yield has to be quite low, Yahoo tells me 1.5%.
Correct
I don’t know how Yahoo computed the figure. Last year this fund distributed a total of CHF 1.61/share (out of which CHF 0.59 was a benefit in capital’s payment exempt of income tax for a Swiss private investor) with a share price of CHF 68.83 on 31.12, we got 2.33%.
You don’t go to Swiss real estate funds for the high yield. There are better suited investments for this.
Thanks for precising, indeed the SRFCHA invests in funds plus stocks and and SRECHA invests only in funds, quite confusing…
Thanks for the clarification. For example VNQ seems to trade at a discount of ~3% when IPRP price seems to be inline with the NAV as far as I understand… I feel way more attracted by those funds in term of fundamentals.
My question would be, why would you pay UBS a 30% premium, and higher overall fees for something less diversified? Maybe the 30% premium is an accounting trick to pay less taxes? Maybe it is just the perceived safety and stability of the Swiss real estate market that justify this premium for investors?
Swiss REIT’s ETFs are a bad idea because (1) the mix of funds is not tailored to your needs (tax-free vs taxed, the % of commercial can be to high for you etc.). (2) the fees are too high. (3) You buy funds that are too expensive. For example Solvalor 61’s NAV is 203.05, according to my model and depending on my tax rates I would pay up to ~250, but the price is 319…
Choosing the funds you buy and at what price needs some research, but if you know for example that you only want residential funds for minimum correlation with stocks, there must be like only ~20 funds to look at.
Bibi4 has mention Swiss Prime Site and PSP. These are big commercial real estate companies that are part of the SPI. Because they are stocks and commercial real estate they are highly correleted with the rest of the market so I wouldn’t buy them outside of a SPI or world index.
I found another small difference between SRFCHA and SRECHA in regards to the part of commercial real estate included in the respective ETF:
SRFCHA: 44% commercial REIT and 42% residential REIT
SRECHA: 52% residential REIT and 33% commercial REIT
So in these terms SRECHA might be slightly “safer” in these times which is also reflected in the % volatility numbers which is less for SRECHA compared to SRFCHA.
For reference here are the PDF factsheets:
SRFCHA: https://www.justetf.com/servlet/download?isin=CH0124758522&documentType=MR&country=CH&lang=de
SRECHA: https://www.justetf.com/servlet/download?isin=CH0105994401&documentType=MR&country=CH&lang=de
Unfortunately SRECHA has the higher TER (0.93%) compared to SRFCHA (0.75%). On the other hand SRECHA has a much bigger AUM which is a good sign.
So as those REIT are quite strongly correlated with the rest of the stock market, even for a pure residential ETF. Maybe it is a bit pointless to compare them to bonds or as an alternative to stocks.
It is not a pure residential ETF. It has at least 15% of storage units and at least 8% of care homes walls.