RDOG tracks the S-Network REIT Dividend Dogs Index, a benchmark that’s similar to those found on ALPS’s other dividend dogs ETFs.
“Many investors are concerned that the continued growth of e-commerce is a large, structural negative trend for brick-and-mortar retail,” writes Morningstar analyst Kevin Brown. “However, we believe the omnichannel strategy–e-commerce sales by traditional retailers–that is being increasingly pursued by most national retailers favors the high-quality portfolios owned by the retail real estate investment trusts.”
The Surprising Case for Retail
There has been plenty of talk about the rise of e-commerce and online retail companies, with much of that coming at the expense of traditional brick-and-mortar retailers. While the number of store closures across the U.S. is expected to jump in the coming years, writing obituaries for shopping malls may be a bit premature.
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RDOG tracks the S-Network REIT Dividend Dogs Index, a benchmark that’s similar to those found on ALPS’ other dividend dogs ETFs.
Part of the allure of RDOG is its allocations to faster-growing real estate segments, including industrial real estate investment trusts (REITs). RDOG’s weight to industrial REITs is higher than those found in many competing strategies.
While some analysts are speculating that industrial REITs could be confounded by weakening consumer confidence on par with retail ETFs, other data points suggest RDOG is positioned to endure retail weakness. In fact, thanks to the e-commerce boom, the ETF is poised to thrive as shoppers move online.
RDOG tracks the S-Network REIT Dividend Dogs Index, a benchmark that’s similar to those found on ALPS’ other dividend dogs ETFs.
To conclude 2020, the real estate sector and RDOG are bouncing back, indicating these assets could be in style in 2021 as interest rates remain low.
“Real estate investment trusts (REITs) are an undervalued opportunity for 2021 as it underperformed this year due to fears of a repeat of the Global Financial Crisis (GFC), according to American Century Investments,” reports
REITs and the RDOG ETF Methodology
RDOG also has a layer of payout protection not found in rival REIT ETFs. The fund requires member firms to have Trailing Twelve Month (TTM) Funds From Operations per share (FFOPS) that exceed TTM Dividend Payouts per share (DPS). That’s an important trait when considering the rough payout environment endured by REITs in the first half of 2020.