Global Real Estate ETFs Take Off

Investors Chasing Global Real Estate ETFs

First Published Date: September 24, 2014

Who would not like the idea of buying global real estate without leaving home? No wonder global real estate ETF investments skyrocketed. As Bloomberg recently reports in an article, investors are gobbling up global real estate companies at a record pace.

According to the Bloomberg article, global real estate ETF the SPDR Dow Jones International Real Estate ETF (RWX) attracted 340 million in August, the most of any ETF that is comprised of property, mainly non-U.S. real estate.

Global real estate demand has dramatically exploded since the global financial crisis as investors started to look for a safe haven to park money and get higher returns.

As I mentioned in this article on A Dawn Journal in March, 2014, a PwC report mentioned that the global real market will grow substantially in the future due to rapid urbanization and demographic changes.

If you are looking for some global real estate ETFs, here are some places to start with your research. The iShares Global Real Estate (CGR) is a popular name trading on the Canadian exchange. On the U.S. exchanges there are SPDR DJ International Real Estate (RWX), SPDR DJ Global Real Estate (RWO), and Vanguard Global ex-U.S. Real Estate ETF (VNQI), among others.

Like any other investments, global real estate ETFs are subject to various risks such as market risk, currency risk, interest rate risk, credit risk, and so on. Also, do your homework before getting into any investments.

What Is Your Mutual Fund Actually Costing You

Mutual Fund Fees You Pay

First Published Date: Dec 5, 2008.

These days you will hardly find an investor without having at least one mutual fund. Most of us never pay any attention to mutual fund fees, which can be very confusing and hard to grasp. Many of us do not realize how much of our returns can be evaporated by these fees. I consider one of the best features of mutual funds is that fund companies camouflage fees as a percentage of assets.

There are 3 basic categories of mutual fund fees – management fees which is known as MER, sales fees and special fees. I will discuss the only MER because regardless of what type or class fund you buy, MER is a built-in feature and it will be always there.

MER stands for Management Expense Ratio and expressed as a percentage of fund total value. MER is made of sales, administration, marketing, legal, accounting, reporting and portfolio management costs and charged directly to the fund, thus reducing the value of your investment. You will never see any statement or transaction or invoice or you will never write a check to pay MER as fund companies deduct this cost from funds per unit value every day, making it invisible and hard to track. MERs can run from ?% to over 3% or even more.

Let’s say a fund charges an MER of 2.5% which may sound harmless but when you look at in terms of real numbers, it looks scary and hard to believe. Suppose you have $100,000 in a mutual fund which charges 2.5% MER. Assuming you are 30 and will have this $100,000 invested till you reach 70. How much is your cost? The answer is a whopping cost of $100,000 ($100,000 * 2.5% per year for 40 years) I used very simplified calculations and omitted many other factors.

Remember, there are other costs and taxes to pay as well. Be a smart investor by educating yourself and avoiding fees and expenses. There are a variety of options these days and always do your homework before investing and seek help from someone whom you find knowledgeable and trustworthy.

RBC Launches 5 New ETFs

New Dividend ETFs From RBC

First Published Date: November 16, 2014

RBC Global Asset Management launched 5 new dividend ETFs targeting various sectors in the international markets. These ETFs offer monthly income, along with broad international diversification and reduced foreign currency risk.

Let’s look at these 5 ETFs in brief:

RBC Quant Emerging Markets Dividend Leaders ETF (TSX: RXD, MER: 0.64%) – Holds dividend-paying companies in the emerging markets that have growth potential based on modified cap weighting methodology. The ticker symbol for the US$ version is RXD.u.

RBC Quant European Dividend Leaders ETF (TSX: RPD, MER: 0.49%) – Holds dividend-paying companies in the European markets that have growth potential based on modified cap weighting methodology. RPD is the first European dividend trading on the Canadian stock exchange that is not hedged. The ticker symbol for the US$ version is RPD.u.

The three other ETFs are currency-hedged. These are:

RBC Quant U.S. Dividend Leaders (CAD Hedged) ETF (TSX: RHU)

RBC Quant European Dividend Leaders (CAD Hedged) ETF (TSX: RHP)

RBC Quant EAFE Dividend Leaders (CAD Hedged) ETF (TSX: RHI)

Altogether, there are 8 RBC Quant Dividend Leaders ETFs and 17 total ETFs offered by the RBC Global Asset Management.

How do the fees for these MERs compare? Let’s look at RBC Quant Emerging Markets Dividend Leaders ETF and some other emerging market dividend ETFS. The SPDR® S&P Emerging Markets Dividend ETF charges 0.59% MER, iShares Emerging Markets Dividend ETF charges 0.68%, and HAJ Horizons Active Emerging Markets Dividend ETF charges 0.80 percent. As you can see, RBC’s MER is fairly similar with other ETFs for the same emerging market dividend ETFs.

Always do your research before buying any investment products and seek professional advice if you are not comfortable picking your own.

Canada Starts New Prepaid Credit Card Rules

New Prepaid Credit Card Rules

First Published Date: May 24, 2014

As prepaid credit cards’ popularity jumped, so did the various fees associated with them. Once credit card companies saw these credit cards were in high demand, they did not waste a moment coming up with innovative ideas to attach various bizarre fees that can be charged when you buy and use prepaid credit cards. Such fees include maintenance fees, activation fees, ATM fees, and possibly more.

As consumer complaints start piling up, the federal government had no option but to start restricting some of these fees. These new rules have come into effect starting in May. Let’s look at some of these rules.

– A ban on maintenance fees for at least one year once you start using it.

– No more expiration date.

– All the required info related to the fees and using cards will have to be clearly visible and simple enough so consumers can see, read, and understand them before buying.

– The Financial Consumer Agency of Canada (FCAC) will monitor and enforce these rules.

– All federally regulated institutions will fall under these rules.

Prepaid cards are similar to credit cards, except that you will have to pre-load funds before you start transactions like credit cards such as making purchases and buying online. Although prepaid cards are a relatively new concept, their popularity recently skyrocketed. According to an estimate, the prepaid card industry is worth $850 million.

These new rules imposed by the federal government are definitely steps in the right direction to protect consumers. However, these could have been done some time ago and there was no need to wait for consumer complaints to start piling up.

Finding Dividend ETFs Beyond Canadian Borders

Three Global High Dividend ETFs

First Published Date: February 2, 2014 ADawnJournal.com

As the pages fall from the calendar and time spins inexorably on, dividend investors step up their quest for dividend ETFs further beyond Canadian borders. Today, I will talk about three dividend ETFs that are trading outside Canada and holding high yield stocks around the globe.

SDIV – Global X SuperDividend ETF MER 0.58% – SDIV tracks 100 diversified high dividend paying companies across the globe, including the US, but with a lesser concentration on the emerging markets. If a company cuts its dividend, SDIV gets rid of that company at the next quarterly review. As of this writing, 12-month dividend yield is 7.22%.

DWX – SPDR S&P International Dividend ETF MER 0.45% – DWX tracks 100 high dividend mid-cap companies across the globe, excluding the US, but with a higher concentration on the Australian market. Yield is 6.61%.

DOO – WisdomTree International Dividend ex-Financials ETF MER 0.58% – DOO tracks 92 large and mid-cap companies across the globe, excluding the financial sector, with a higher concentration on the UK market and lesser concentration on the US market. Yield is 2.73%.

There are many other high-dividend global ETFs trading on the US exchanges. High yield comes with high risks. Do your homework before making any investment decisions.

Disclosure – This article is for information purposes only and No information is intended as investment, tax, accounting or legal advice, or as an offer to sell or buy or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security, ETF, or fund. The author assumes no liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon. You bear responsibility for your own investment research and decisions, and should seek the advice of a qualified financial professional before making any investment decision. As of this writing, I do not own any of the ETFs mentioned here.