THE GHOST TRAIN
THE FINANCE GHOST: How to make property perform for you
Dividends aren’t enough to justify the equity risk, so for now the best strategy is to hold the two major ETFs in a tax-free savings account
The first quarter of 2024 has been more of the same in the local property sector, with only dividends for shareholders to enjoy and no share price upside. The two major exchange traded funds (Satrix Property ETF and 1nvest SA Property ETF) are both flat for the year excluding dividends. They are trading at similar levels to three years ago, so the post-pandemic period for the sector has been one of treading water. Though dividends certainly help, yield alone isn’t enough to justify the equity risk for investors.
At a time when inflation has been running rampant, these property funds haven’t given investors sufficient protection. The silver lining is that dividends from real estate investment trusts (Reits) at least offer positive real returns (the yields exceed inflation), but real returns are also available at your friendly local bank on a reasonable notice account (and with zero equity risk)...
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