Know your ETF - CoreShares S&P Global Property ETF

CoreShares S&P Global Property ETF

Real estate investment trusts (REITS) are listed property companies that pay most of their taxable earnings as dividends to shareholders. Post the pandemic, a common theme dominating investment in Reits was diversified exposure to the sector, given expectations of a structural change from the hybrid work model that has affected office Reits.


Indeed, global property group JLL’s July 2022 “The Future of Work Survey” reports that offering hybrid working options will be critical to attracting and retaining talent for corporate real estate operators.

However, it is hard to separate the performance of all Reits globally and locally from the dominant geopolitical conditions that have affected global inflation, accelerated contractionary monetary policy and stoked concerns about global economic growth all of which have hit global equities.

Accordingly, the FTSE Nareit All Reits Index slumped 29.1% year-to-date in US dollar terms (29 September) while SA’s JSE SA Listed Property Index dropped 21.2% over the same period.

While existing investors may be faced with the hard decision of staying the course or exiting positions, which would lock-in losses, the recent decline in valuations may present an opportunity to bulk up on portfolio positions. In addition to the relatively cheaper valuation levels that the decline in the share prices of Reits presents, we think there is one more benefit from adding the sector to investors’ ETF portfolios: diversification.

According to a 2018 analysis by the US- based National Association of Real Estate

Investment Trusts, the correlation between Reits and the broad stock market (S&P 500) during months which the broader market was down going back to the beginning of 1972 was 0.56.

Assuming that an economic relationship between the two equity sectors exists, this implies that the co-movement between Reits and non-Reit equities was positive but that Reit returns followed the decline in the S&P 500 just over 50% of the time. From a diversification perspective, this implies that there is potential for Reits to outperform the broader stock market during sharp market downturns.

A somewhat similar relationship exists locally SA Reit Association data (August 2012-August 2022) show a correlation coefficient of 0.51 between SA Reits and the FTSE/JSE All Share Index.

In addition to the potential that lower correlations (which increases the likelihood that one sector/asset class outperforms when the other underperforms) can provide to investor portfolios, we think the Q2-2022 data of global Reits is encouraging.

According to Nareit, industry (US) funds from operations (FFO) the measure of cash flow commonly reported by Reits reached an all time high of $19.6bn (Q2 2022), a 9.8% increase from Q1. Importantly, occupancy rates of all Reit- owned properties increased to 93.7%, the first quarter in which they reached and exceeded pre-pandemic levels.

Despite the bearish trend in share prices across sectors, the fundamentals remain relatively strong. Moving forward, we expect funds from operations to come under pressure, especially in consumer  

facing sectors (retail and lodging/resorts). The residential Reits sector may be defensive as higher interest rates should lead to a decline in mortgages, possibly boosting the rental market. Overall though, we would favour diversified exposure to global Reits as a sector, as we believe that reduced economic activity globally will likely affect the local economy more than economies abroad.

Accordingly, the CoreShares S&P Global Property (this week’s ETF pick) tracks the performance of the S&P Global Property 40 index. The ETF tracks the index by buying constituent securities in the same weighting as in the S&P Global Property 40 index. The index uses the float-adjusted method of market capitalisation, which excludes closely held or non-tradeable shares, thereby improving the liquidity of the index.  

However, one of the drawbacks of the CoreShares S&P Global Property ETF is its relatively high total investment cost of 0.53%. It compares less favourably to a direct peer such as the Sygnia Itrix Global Property ETF, which charges a TIC of 0.27% and tracks the same index (S&P Global Property 40 Index). The TIC of 0.53% is also higher than the average of 0.46%, which we estimate using peers such as the 1nvest Global REIT Index Feeder Fund (0.34%) and the NewFunds Reitway Global Property ETF (0.69%).

Given the analysis above, we believe that the CoreShares S&P Global Property ETF would add value to investors as part of an overall ETF portfolio.

Fund suitability  

  • This ETF suits investors with a high risk appetite seeking exposure to listed property over a long-term investment horizon.


  • The fund has a total investment cost of 0.53%.

Top 5 Sectors (%)

  • Office REITs - 11.7%

    Diversified REITs - 12.9%

    Industrial REITs - 17.2%

    Specialised REITs - 18.1%

    Residential REITs - 23.8%

CoreShares S&P Global Property ETF (JSE:GLPROP)

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Background: Exchange-traded funds (ETFs)

Exchange-traded funds (ETFs) are passively managed investment funds that track the performance of a basket of pre-determined assets. They are traded the same way as shares and the main difference is that whereas one share gives exposure to one company, an ETF gives exposure to numerous companies in a single transaction. ETFs can be traded through your broker in the same way as shares, say, on the EasyEquities platform. In addition, they qualify for the tax-free savings account, where both capital and income gains accumulate tax free.

Benefits of ETFs

  • Gain instant exposure to various underlying shares or bonds in one transaction
  • They diversify risk because a single ETF holds various shares
  • They are cost-effective
  • They are liquid – it is usually easy to find a buyer or seller and they trade just like shares
  • High transparency through daily published index constituents


This research report was issued by Intellidex (Pty) Ltd. Intellidex aims to deliver impartial and objective assessments of securities, companies or other subjects. This document is issued for information purposes only and is not an offer to purchase or sell investments or related financial instruments. Individuals should undertake their own analysis and/or seek professional advice based on their specific needs before purchasing or selling investments. The information contained in this report is based on sources that Intellidex believes to be reliable, but Intellidex makes no representations or warranties regarding the completeness, accuracy or reliability of any information, facts, estimates, forecasts or opinions contained in this document. The information, opinions, estimates, assumptions, target prices and forecasts could change at any time without prior notice. Intellidex is under no obligation to inform any recipient of this document of any such changes. Intellidex, its directors, officers, staff, agents or associates shall have no liability for any loss or damage of any nature arising from the use of this document.


The opinions or recommendations contained in this report represent the true views of the analyst(s) responsible for preparing the report. The analyst’s remuneration is not affected by the opinions or recommendations contained in this report, although his/her remuneration may be affected by the overall quality of their research, feedback from clients and the financial performance of Intellidex (Pty) Ltd.

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