Real Estate EFTs See More Investment Amid Pandemic Recovery

The $ 6.2 billion iShares US Real Estate ETF posted $ 1.3 billion in inflows last week. (Getty)

Investors invest money in publicly traded real estate funds, in part as a bet on the storage and supply chain sectors.

The $ 6.2 billion iShares US Real Estate ETF saw an inflow of $ 1.3 billion last week, its highest level ever, making it the second-biggest winner among ETFs. The $ 41.4 billion Vanguard Real Estate ETF raised $ 338 million after inflowing $ 1.2 billion in May, according to Bloomberg News.

While much of the commercial real estate activity reflects optimism about the reopening, the need for more data and supply chain storage has remained constant before and during the pandemic.

“It appears that investors are using real estate ETFs to capitalize on global logistics concerns,” Athanasios Psarofagis, analyst for Bloomberg Intelligence ETFs, told the publication.

Other real estate ETFs are likely to do similarly as the strong demand for real estate, especially residential property, remains unsatisfied due to low supply and rising building material and labor costs.

“The sharp rise in single-family home prices is unprecedented in a recession and offers plenty of scope for residential REITs,” BTIG analyst James Sullivan told Bloomberg.

[Bloomberg] – Sasha Jones

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