First Trust S&P REIT Index Fund (ARCA: FRI)

First Trust S&P REIT Index Fund (ARCA:FRI), Top Holdings

First Trust S&P REIT Index Fund

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The fund will normally invest at least 90% of its net assets (including investment borrowings) in the real estate investment trusts (REITs) that comprise the index. The index seeks to measure the performance of publicly-traded traded REITs domiciled in the United States that meet certain eligibility requirements.

Prologis Reit Inc

Equinix, Inc., Reit

Welltower Inc. Reit

Realty Income Corp.

Simon Property Group Inc

Public Storage, Series K, 4.750%

Digital Realty Trust Inc.

Extra Space Storage Reit Inc

Vici Properties Inc

Iron Mountain Inc. Real Estate Investment Trust

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Office Real Estate Crisis Predicted To Worsen By 2030: How Major Cities Can Adapt

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REIT ETFs Become Buyback Beneficiaries

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Debunking Some Common ETF Myths

FRANCE MGI DIGITAL GRAPH by France MGI Digital Graphic Technology

MGI Digital Graphic Technology SA

FIRST IDAHO RESOURCES INC by First Idaho Resources Inc.

First Idaho Resources Inc

Fortune Real Estate Investment Trust Units Real Estate Investment Trust

Fortune Real Estate Investment Trust

FRIENDTIMES INC by FRIENDTIMES INC.

FRIDAYS DOG HLDGS INC NEW by Fridays Dog Holdings Inc.

Fridays Dog Holdings Inc

Friedman Industries Inc

FRIEDRICH VORWERK GROUP by Friedrich Vorwerk Group SE

Friedrich Vorwerk Group SE

FRIEDRICH VRWRK GRP U/ADR by Friedrich Vorwerk Group SE

Friendable Inc

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Fritzy Tech Inc

Investing in commercial real estate has bottomed out, and according to a new report, office occupancy in large urban centers is not going back to <a href="http://benzinga.com/real-estate/23/07/33216658/if-commercial-real-estate-investment-has-bottomed-out-it-could-take-as-long-as-two-years-to-recover">pre-pandemic levels for decades.</a>
The new 88-page report was published Thursday by the McKinsey Global Institute, an international research firm focused on economic and business issues.
<h3 class="wp-block-heading">Major Urban Centers Never Recovered From The Pandemic</h3>
The COVID-19 pandemic was one of the most economically damaging events of the century so far. The total toll of the pandemic has been estimated to reach between $14 trillion and $16 trillion for the U.S. economy by 2023.
Yet, the pandemic also left other marks that are becoming noticeable in specific industries. For real estate, it means that office space in large cities will likely never be what it once was.
The report examined 17 &#8220;superstar&#8221; cities across six countries, which are typically large urban areas that contribute significantly to the world&#8217;s GDP and its growth. The pandemic-induced shifts in work behavior, coupled with advancements in technology, have drastically changed how employees engage with their workspaces.
"Hybrid work is here to stay," said McKinsey.&nbsp;
Today, employees visit the office, on average, 3.5 times a week. That's down 30% from 2019 levels.
Large companies in the service sector accounted for the lowest levels of office attendance. In firms with more than 25,000 employees offering professional services, workers now come into the office about 3 times a week.
These numbers are in line with peoples' wishes. Most of the subjects surveyed by McKinsey said their preferred number of days to go to the office was 3.2 a week, and 10% of them even said they'd quit their job if required to attend the office every day.
The consequences of this cultural shift around work is affecting more than just office space. Urban cores lost inhabitants in a trend that's disproportionately affecting big cities in the U.S. New York and San Francisco are among the cities to lose the most urban dwellers between 2020 to 2022, with a 5% and 6% drop respectively.
This has led to reduced walking traffic for store fronts in urban centers, <a href="https://www.benzinga.com/general/education/23/07/33119760/amazon-was-founded-29-years-ago-today-if-you-invested-1-000-in-amazon-stock-at-ipo-in-1997-here">lending to a rise in online shopping</a>. Foot traffic near stores in metropolitan areas is still 10% to 20% lower than in 2019.
The drop in demand is also affecting rent prices. From 2019 to 2022, asking retail rents declined an average of 5.4% in the cities analyzed.
Also Read: <a href="https://www.benzinga.com/general/entertainment/23/07/33214402/desantiss-lasting-harm-to-disney-in-florida-pushes-mouse-house-to-boost-california-investme">DeSantis&#8217;s &#8216;Lasting Harm&#8217; To Disney In Florida Pushes Mouse House To Boost California Investments</a>
<h3 class="wp-block-heading">Office Real Estate Only Got The First Taste Of The Decline</h3>
"In the scenarios we modeled, the amount of office space demanded in most cities does not return to pre-pandemic levels for decades," said the firm.
According to McKinsey, the behavioral changes caused by the pandemic will continue to push down demand for real estate in most big urban centers due to lower office attendance, accelerated out-migration from cities, and less shopping in office-heavy neighborhoods.
The firm modeled two scenarios for 2030: one moderate and one severe. The more severe scenario assumes that by 2030, all office workers will follow the ongoing trend in large companies offering professional services in the knowledge economy, which present the highest levels of hybrid work and reduced office attendance.
In the moderate scenario, the median city will have 13% less demand for office space by 2030. The drop in demand climbs to as much as 38% in the severe scenario for some cities. This can lead to a drop in the total value of office space in large cities of between 26% from 2019 to 2030 in the moderate scenario, to a 42% drop in value in the severe one. 
<h3 class="wp-block-heading">How Will Urban Centers Adapt?</h3>
One trend that could save urban cores from decline can be to adopt a strategy of mixed-use development.
"Turning empty spaces into hybrid places could be a way to transform superstar cities and prepare them for a dynamic, prosperous future," said McKinsey.
This can be done by either adapting existing office buildings into office/residential hybrids or by developing new projects with this approach in mind. According to McKinsey, mixed-use neighborhoods have proven to be more resilient during the pandemic than office-dominated ones.
From the developer's side, building new buildings with a flexible floor plan can allow the properties to maintain their value through shifts in demand.
Regardless of the challenges facing office demand in the coming decade, ETFs following the commercial real estate space are having a week on the green side.
<ul>
<li>Invesco S&amp;P 500 Equal Weight Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWRE#NYSE">EWRE</a>) is up 0.2% on Thursday at the time of this writing and 2.6% in the past five days.</li>
<li>iShares Core U.S. REIT ETF (ACRA:USRT) is up 0.17% on Thursday and 2.2% in the last five days.</li>
<li>First Trust S&amp;P REIT Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FRI#NYSE">FRI</a>) is down 0.6% on Thursday but up 2.4% in the last five days.</li>
<li>iShares U.S. Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYR#NYSE">IYR</a>) is up 0.14% on Thursday and 2.6% in the last five days.</li>
</ul>
Now Read: <a href="https://www.benzinga.com/news/23/07/33193585/mark-zuckerberg-and-elon-musk-have-the-button-that-ceos-like-sundar-pichai-dont-says-top-hacker">Mark Zuckerberg And Elon Musk Have The &#8216;Button&#8217; That CEOs Like Sundar Pichai Don&#8217;t, Says Top Hacker</a>
Picture made with artificial intelligence using Midjourney AI.

Share repurchases by S&amp;P 500 companies declined during the second quarter from first-quarter levels.
In the second quarter, share repurchases by S&amp;P 500 member firms slid 8.7 percent to $131.6 billion, down from the $144.9 billion posted in Q1 2015, according to <a href="http://us.spindices.com/">S&amp;P Dow Jones Indices</a>.
The silver lining: On a year-over-year basis, <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5863591/slowing-buybacks-drag-on-buyback-etfs">share repurchases increased</a> 13.2 percent over the $116.2 billion reported during the second quarter of 2014, said S&amp;P Dow Jones.
<h3>REITs Join In Buybacks</h3>
The technology and consumer discretionary sectors remained buyback leaders in the prior quarter, but real estate investment trusts (REITs), many of which are sporting compelling valuations, are getting in on the buyback game.
REITs and the ETFs that hold those stocks have been plagued this year by investors&#39; expectations that the Federal Reserve will soon raise interest rates, but &ldquo;an increasing number of REITs have instituted share repurchase programs in 2015,&rdquo; according to SNL Financial.
 A <a href="http://bit.ly/1Fs2CP4">recent article,</a> titled &quot;REITs, in droves, move to repurchase shares&quot; by SNL&#39;s Jacob Wiggins and Tom Yeatts, noted that 28 REITs announced share repurchase plans year-to-date through September 15, with 17 of them occurring in just the third quarter.
&ldquo;With the recent selloff in REIT shares, many companies are trading at notably high discounts to net asset value (NAV),&rdquo; said S&amp;P Capital IQ <a href="http://trymsatoday.com/">in a new research note</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5863591/slowing-buybacks-drag-on-buyback-etfs">Slowing Buybacks Drag On Buyback ETFs</a></bzrelatedlink>
<h3>Thank Goodness It's FRI</h3>
The First Trust S&amp;P REIT Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fri#NYSE">FRI</a>), home to nearly $195 million in assets under management, has a significant percentage of its 158 holdings trading at deep discounts to NAV.
 For example, Brandywine Realty Trust (NYSE: <a class="ticker" href="/stock/bdn#NYSE">BDN</a>), CBL &amp; Associates Properties, Inc. (NYSE: <a class="ticker" href="/stock/cbl#NYSE">CBL</a>) and General Growth Properties Inc (NYSE: <a class="ticker" href="/stock/ggp#NYSE">GGP</a>), each of which are buy-rated by S&amp;P Capital IQ and trade at discounts of 20 percent or more to NAV, according to the research firm.
&ldquo;According to S&amp;P Capital IQ Equity Analyst Cathy Seifert, after rising 2 percent in 2014, GGP revenues will likely increase between 2 percent to 4 percent in 2015 and accelerate to 5 percent to 7 percent growth in 2016, primarily reflecting the impact of better rents and improved occupancy levels. Seifert thinks that a combination of earnings growth and portfolio pruning will help drive GGP shares higher. GGP has a 2.8 percent dividend yield,&rdquo; said S&amp;P Capital IQ.
Those stocks combine for three percent of FRI&#39;s weight. FRI tracks the S&amp;P United States REIT Index, a benchmark with a dividend yield of 2.7 percent, or more than 50 basis points above where 10-year Treasury yields reside at this writing. 
Nearly a quarter of FRI&#39;s holdings are retail REITs with another combined 31 percent allocated to residential and office REITs. 
Image Credit: <a href="https://pixabay.com/en/stock-exchange-trading-floor-738671/">Public Domain</a>

As the pace of ETF closures has quickened <a href="http://www.benzinga.com/news/12/08/2843261/russell-to-liquidate-all-but-one-of-its-etfs">since the start of August</a>, it seems as though more advisors and investors are focusing on assets under management (AUM) and average daily volume as the true telling of a fund's overall health. 

As has been duly noted, <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/04/2465525/etf-opinion-the-100m-watermark-is-asinine">numbers such as $50 million or $100 million in AUM</a> have little in the way of scientific backing. Focusing on these numbers and a certain criteria for average daily volume does serve one purpose though, and it is not good. It keeps investors out of small ETFs that do generate alpha.

In a research note distributed to clients earlier today, Chris Hempstead, director of ETF execution services at WallachBeth Capital, debunked some of the common myths surrounding low-asset and low-volume ETFs. New York-based WallachBeth is one of the largest ETF execution shops in the U.S.

ETFs Under $50 Million in AUM

"In order for an ETF to come to market (list on an exchange) the fund needs to have shares created," Hempstead wrote. "This process is often referred to as seeding. The ‘seeder' is the initial investor who delivers into the custodial bank the assets required to back the initial tradable shares of the ETF in the secondary market. ETFs issue shares in what are known as creation units. The vast majority of ETFs have creation unit sizes of 25,000, 50,000 or 100,000 shares."

In other words, it is rare for a new ETF to rapidly accumulate $50 million in AUM, but this asset total should not serve as a deterrent to investors that care about returns. As Hempstead notes, 10 of the top 30 ETFs in terms of 2012 performance have less than $50 million in AUM.

That list includes funds such as the Market Vectors Egypt ETF (NYSE: <a class="ticker" href="/stock/egpt#NYSE">EGPT</a>), the Guggenheim China Real Estate (NYSE: <a class="ticker" href="/stock/tao#NYSE">TAO</a>) and the EGShares Health Care GEMS ETF (NYSE: <a class="ticker" href="/stock/hgem#NYSE">HGEM</a>).

Average Daily Volume

Plenty of folks <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2848986/do-these-etfs-really-have-liquidity-problems">confuse volume with liquidity</a> and as if that is not bad enough, the focus on volume also directs investors away from solid returns.

Using another top-30 statistic, Hempstead points out 20 of this year's top-30 ETFs have average daily turnover below 250,000 shares.

"[Volume] is the one that really gets my attention; mainly because ETF ADV is not a true measure of the liquidity of the underlying assets and by default, the actual ETF," wrote Hempstead. "In its most basic form, simply looking at ADV and dismissing a fund based solely on that metric might steer you away from funds that are quoted in block size at the minimal increment [one penny]."

Hempstead cites the First Trust S&amp;P REIT Index Fund (NYSE: <a class="ticker" href="/stock/fri#NYSE">FRI</a>) as an example in the volume versus liquidity comparison.

"[FRI] has an ADV of roughly 100k shares per day. The quote in this name however is also roughly a penny wide with 75k shares on each side of the market. This means you can trade roughly 75% of the ADV in a single trade with little or no impact to the quote. This kind of liquidity (as a % of ADV) is rare in single stock names. Unfortunately I suspect that the aversion to trading ETFs with low ADV stems from the realities that exist in single stock trading which again is just not true in ETFs."

Importantly, investors should note they are not necessarily competing against professional market makers with thinly-traded ETFs.

"One other reality in trading low ADV ETFs that every investor should keep in mind is that because an ETF has less volume and in many cases is less widely held, you are likely to be trading against a professional market maker," Hempstead said. "Traders make markets in ETFs based on the funds real time NAV (aka INAV), not last sale. Last sale is one of the most irrelevant metrics in determining the ‘right' price to enter an ETF order."

Closures

There is a growing chorus of folks out there that imply ETF closures are like a shootout at the O.K. Corral and that the process is anything but orderly. However, careful attention is paid to the liquidation process so that investors receive maximum value when a fund permanently closes, Hempstead said. Those that hold ETFs into the fund's final trading day receive what is known as final net asset value when the fund is liquidated.

"It is very important that investors and fund managers understand how and why liquidity exists in ETFs and that sourcing ETF liquidity is materially different in more ways than sourcing single stock liquidity," Hempstead said. "AUM and ADV do NOT accurately assess an ETFs implied liquidity. ETFs are backed by assets, not promises."

For more on ETFs and liquidity, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2848986/do-these-etfs-really-have-liquidity-problems">here</a>.

iShares FTSE NAREIT Real Estate 50 Index Fund

iShares Trusthen & Steers Realty Majors Index Fund

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

iShares FTSE NAREIT Residential PLUS Capped Index Fund

SCHH

Top 10 U.S. Real Estate ETFs

Heading into the start of trading today, there was plenty of chatter about one of the most important technical conditions a trader can encounter: The golden cross. In this case we're referring to a move of S&amp;P 500's 50-day moving average above its 200-day line. 

From Reuters: "In the last 50 years, according to data compiled by Birinyi Associates, a golden cross on the S&amp;P 500 has augured further gains six months ahead in eight out of 10 times. The average gain has been 6.6%."

That's good stuff, but it doesn't look like the golden cross is going to happen today. At least not for the S&amp;P 500. Don't worry because there are plenty of ETFs that have experienced golden crosses recently and that could mean more upside is on the way for these funds in the weeks ahead. (Note: Only non-leveraged ETFs were considered).

First Trust S&amp;P REIT Index Fund (NYSE: <a class="ticker" href="/stock/fri#NYSE">FRI</a>)
In the world of REIT ETFs, there are funds that get a lot more attention than the First Trust S&amp;P REIT Index Fund, but this is still a decent fund. It's also larger than a lot of folks probably realize with over $390 million in assets under management. Home to 120 stocks, FRI's 50-day line just crossed above the 200-day mark a few days ago. As a result the difference between the two is slight, but the ETF has enjoyed a nice start to 2012 and it has a 30-day SEC yield of almost 3.4%.

iShares Dow Jones Transportation Average (NYSE: <a class="ticker" href="/stock/iyt#NYSE">IYT</a>)
The iShares Dow Jones Transportation Average has been another solid performer in 2012 and the fact that this economically sensitive ETF has experienced a golden cross could prove to be a bullish sign for the broader market. FedEx (NYSE: <a class="ticker" href="/stock/fdx#NYSE">FDX</a>) has only recently made a golden cross of its own, so further momentum in that stock along with the major railroad operators could propel IYT in the near-term.

Vanguard Mega Cap 300 Index ETF (NYSE: <a class="ticker" href="/stock/mgc#NYSE">MGC</a>)
For those longing for a golden cross with the comfort of mega-cap stocks, we present the Vanguard Mega Cap 300 Index ETF. Actually, MGC is home to 304 stocks and nine out of its top-10 holdings are Dow stocks with Apple (Nasdaq: <a class="ticker" href="/stock/aapl#Nasdaq">AAPL</a>) being the exception. MGC has nearly $504 million in assets under management and with an expense ratio of 0.12% is cheaper than 89% of comparable funds, according to the Vanguard Web site.

MGC's near-term issue is finding support at its 20-day moving average or breaking resistance at $46. This ETF is more defensive than "risk on" so be aware of that if high beta fare leads a 2012 rally.

Vanguard Growth ETF (NYSE: <a class="ticker" href="/stock/vug#NYSE">VUG</a>)
The Vanguard Growth ETF is one we've been <a href="http://www.benzinga.com/news/earnings/12/01/2285808/sink-or-swim-apple-earnings-could-move-these-etfs">bullish on for a while</a> and the ETF has rewarded that view with a year-to-date gain of about 6%. As we always say about VUG, this is the type of growth ETF conservative investors can embrace as a fair amount of VUG's holdings are value, not growth stocks. An expense ratio of 0.12% means the ETF is cheaper than 91% of comparable funds. A golden cross means VUG could find its way to $70.

PowerShares KBW High Dividend Yield Financial Portfolio (NYSE: KBWD)
While big bank stocks are still offering piddly dividends and yields, the PowerShares KBW High Dividend Yield Financial Portfolio, about two-thirds of which is devoted to small-cap value stocks, features a distribution yield of almost 10%. KBWD tracks small region banks, insurance providers and mortgage REITs among other financial services firms. The ETF currently resides about 40 cents off its 52-week high.

Dividends

AAPL

iShares Dow Jones Transportation Average Index Fund

ETFs For The Golden Cross

The following REIT ETFs are up over 16% or higher of the past year.
Vanguard REIT ETF (NYSE VNQ) 
Dow Jones U.S. Real Estate Index Fund (NYSE: <a class="ticker" href="/stock/iyr#NYSE">IYR</a>) 
Cohen &amp; Steers Majors Index Fund (NYSE: <a class="ticker" href="/stock/icf#NYSE">ICF</a>) 
SPDR Dow Jones REIT ETF (NYSE: <a class="ticker" href="/stock/rwr#NYSE">RWR</a>) 
Vanguard REIT ETF (NYSE: <a class="ticker" href="/stock/fty#NYSE">FTY</a>) 
First Trust S&amp;P REIT Index Fund (NYSE: <a class="ticker" href="/stock/fri#NYSE">FRI</a>) 
Vanguard REIT ETF (NYSE: <a class="ticker" href="/stock/ifna#NYSE">IFNA</a>)
All REIT ETFs are trading over 100-DMA &amp; 200-DMA, signifying a bullish trend.

Technicals

Economics

iShares FTSE EPRA/NAREIT North America Index Fund

IFNA

REIT ETFs: Investor's Starting To Take Notice (VNQ, IYR, ICF, RWR, FTY, FRI, IFNA)

In midday trading Monday, the First Trust S&amp;P REIT Index Fund ETF (AMEX:FRI) is outperforming other ETFs, up about 3.6% on the day. Components of that ETF showing particular strength include 
(...)Read the rest of Monday, May 3rd ETF Movers: FRI, PWO 
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