ETFs for Better Income Yields

CSRE and CSPF collectively, they are really two great examples of our overall capabilities here at Coensteers as a uh specialist manager in real assets and alternative income.

If we look at CSRE first, our real estate active ETF, this reflects our over 38 years of innovation as an industryleading real estate platform.

That's what many of our clients know us for.

And to your point, uh you're spot on.

Investors often look to real estate as an income source.

And just to give you a sense, if you look at US REITs right now, they're yielding around 3.9%.

The S&P 500 yielding around 1.2 or so.

But it's not just about income.

You know, if we look at the last 25 years, for example, listed real estate, it's delivered really strong returns as well.

It's averaged around 9.9% annually versus 7.7% for the S&P 500. and at the same time it's provided a lot of meaningful diversification benefits as well as inflation hedging properties as well.

So there's a lot going on with REITs that we think uh present an attractive opportunity and we have to consider also that though REITs are they're exchange exchange traded securities uh they're also real assets they're hard assets this presents a lot of inefficiencies in the market and a lot of opportunity for a manager like Koma Sears to add value you know we look at both security selection and sector allocation and and as major drivers of our alpha um if we look on the preferred side of things our preferred and income opportunities active ETF ticker CSPF.

Uh this focuses primarily on generating high tax efficient income.

If you look at most preferred securities, they pay QDI right qualified dividend income which is taxed at a much much lower rate of uh typically around 20% versus your typical taxable bond that's taxed as ordinary income which is for top earners 37%.

So if you look today uh preferred yield approximately 6.6% before taxes and on an after tax basis it's about 4.6% for top earners.

If you compare this to the landscape of fixed income this puts them as you know one of the highest yielding sectors in the bond world especially on an after tax basis.

U they also offer a lot of uh diversification from a sector standpoint.

You know, they have low sector overlap to other areas such as investment grade bonds and high yield bonds.

And they also have attractive correlations relative to other bond sectors as well which we spend a lot of time talking about with our investors in terms of divers diversification in fixed income.