Hantoo Asset Management's 'ACE US Dow Jones REITs' Tops 3-Month Returns Among REIT ETFs

Korea Investment Trust Management announced on the 14th that the ACE US Dow Jones REITs (Synthetic H) Exchange-Traded Fund (ETF) recorded the highest recent 3-month return among REITs ETFs.

According to the Korea Exchange, as of the previous day, the recent 3-month return of the ACE US Dow Jones REITs (Synthetic H) ETF was 11.19%. This is significantly higher than the average return of 5.37% recorded by 13 REITs ETFs during the same period. The returns for the past 1 year and since inception are 10.64% and 68.19%, respectively. However, based on the recent 3-year return, it was recorded at -12.39% due to the sluggish stock prices of REITs during the interest rate hike period.

The ACE US Dow Jones REITs (Synthetic H) ETF is a product based on the Dow Jones US Real Estate Index. This index is characterized by including stocks of REITs and real estate-related companies listed on the US stock market. According to data released by the Ministry of Land, Infrastructure and Transport in June, the US listed REITs market is valued at 1,604 trillion KRW, boasting an overwhelming scale compared to the domestic market (8 trillion KRW).

Starting this month, the ACE US Dow Jones REITs (Synthetic H) ETF has enhanced its investment appeal by switching its dividend payment policy to monthly dividends. Considering the increased demand for monthly dividends in the recent ETF market, the method was changed from reinvesting dividends to monthly dividend payments. The first dividend will be paid starting from September, with the record date set as the 29th of this month.

The extension of the special tax treatment on dividend income from public REITs is also an investment point. The Ministry of Economy and Finance extended the 'special tax treatment on dividend income from publicly offered real estate collective investment securities,' which was originally scheduled to apply until the end of 2023, until 2026 through last year's tax law amendment.

Kim Seung-hyun, head of ETF marketing at Korea Investment Trust Management, explained, "Recently, the global REITs market, including the US and Singapore, is rapidly rebounding due to reduced interest expenses following interest rate cuts," adding, "REITs, as tangible assets, are noteworthy from an asset allocation perspective amid expanding market volatility." He further added, "REITs are especially one of the representative assets expected to benefit from base rate cuts, offering steady dividends and tax-saving effects."