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First Trust to launch First Trust Heitman Global Prime Real Estate ETF


First Trust Advisors is to launch a new exchange-traded fund (ETF), the First Trust Heitman Global Prime Real Estate ETF, providing access to US and non-US real estate securities consisting of shares of public companies with professional management teams that own top tier, prime properties in the world’s dominant cities while seeking long-term total return.

Global prime real estate assets are, by nature, few and in high demand. Historically, constructing a well-diversified portfolio of private prime real estate assets has been difficult to accomplish. But, research has shown that a concentration of investments in prime markets and prime assets in targeted “gateway” cities is obtainable in the publicly listed market. Against this backdrop, First Trust believes a portfolio of select public real estate companies, when actively managed by a highly experienced portfolio management team, has the potential to act as a proxy for direct prime real estate investments while seeking to provide high risk-adjusted returns. 

“This ETF provides a unique tool for investors to gain exposure to an actively managed portfolio of some of the most attractive prime real estate assets around in the world, in a way that’s both diversified and liquid,” says Ryan Issakainen, CFA, Senior Vice President, Exchange-Traded Fund Strategist at First Trust.

Heitman Real Estate Securities LLC (“HRES”), Heitman International Real Estate Securities HK Limited, and Heitman International Real Estate Securities will manage the fund’s portfolio. Heitman will combine top-down and bottom-up analysis when managing the fund’s portfolio in order to identify real estate securities which they believe provide the greatest potential for capturing the benefits of long-term real estate investing. 

“As investors in the real estate space for almost 50 years, we know first-hand the benefits of investing in prime real estate and prime markets around the world. While we believe owning prime real estate makes sense through all market cycles, we see now as a particularly good time to invest, as real estate investment trusts (“REITs”) are trading at discounts to their underlying real estate value,” says Kathy Sandstrom, Senior Managing Director of Heitman’s Public Real Estate Securities business.

The fund’s Portfolio Managers include Jerry Ehlinger, CFA, Managing Director of HRES and Portfolio Manager; Mark Abramson, Managing Director of Heitman International Real Estate Securities GmbH and Portfolio Manager; and John White, Managing Director of Heitman International Real Estate Securities HK Limited and Portfolio Manager.

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