Alternative Investments/Real Estate: AXS Investments Launches Mortgage REIT Focused ETF
The new ETF from AXS Investments offers investors a strategically timed exposure to real estate credit.
AXS Investments has teamed up with Gapstow Capital Partners to introduce a novel ETF named the AXS Real Estate Income ETF (NYSEARCA: RINC). This ETF offers an innovative avenue for higher yields through exposure to liquid real estate investments.
RINC is tracks the Gapstow Real Estate Income Index (GREI), which is a unique index developed by Gapstow Capital Partners designed to track publicly traded mortgage REITs (mREITs) that own and/or originate real estate debt.
Furthermore, unlike other mREIT-focused ETFs, RINC is balanced across sectors, with 50% in commercial real estate lending, 25% in non-agency residential real estate debt, and 25% in agency residential real estate debt. This diversification helps manage risk and maintain a well-rounded portfolio.
The partnership between AXS Investments and Gapstow Capital Partners aims to provide investors and advisors with an alternative to corporate junk bonds, offering distinct exposure to real estate credit. This move diversifies the high-yield segment of portfolios and presents a fresh approach to credit-side real estate investments.
Notably, at present, mREITs are trading at attractive prices and significant spreads compared to historical norms. This is due to the sector reeling from the confluence of a swift increase in interest rates, elevated office vacancy rates, and a brief series of banking crises in a short span of time. However, over time, interest rates are expected to stabilize, the demand for residential housing will persist, and a distinct withdrawal of banks from real estate lending is likely to offer substantial prospects for various mREITs. These opportunities encompass the ability to undertake and initiate compelling new debt investments.
RINC joins AXS Investments’ suite of alternative income solutions, expanding the range of options available to investors seeking diversified income and growth opportunities.
Gapstow Capital Partners, with its solid background in multi-asset credit investing, brings valuable expertise to this venture.
Related Story: Columbia Threadneedle Debuts ETF Focused On REITs
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